The Supreme Court has weighed in once again in support of homebuyers left in the lurch by insolvent builders by asking the government to frame a uniform policy to protect them. The court’s observations came amid a slew of similar matters before it involving erstwhile real estate giants like Unitech, Jaypee, and others besides the real estate lobby’s challenge against the amendment to the Insolvency and Bankruptcy Code treating homebuyers as financial creditors.
It is unfortunate that matters have come to this state. The housing slump is a nightmarish scenario left behind after a racy story of unparalleled greed and fraud, super easy credit flows, and unabashed optimism that the India growth story would not slow down any time in the near future, which was derailed earlier this decade. Lakhs of homebuyers are saddled with home loans and unfinished homes for which many are still paying EMIs. Government has a responsibility to protect these people. The IBC amendment to circumvent other time consuming remedies in Consumer Protection Act and Real Estate Regulation Act has been part of the official response.
In the same vein government also needs to prop up the real estate sector to kickstart a recovery. With few takers to complete giant projects left unfinished by others, government must offer incentives to those companies that come forward like subsidised land and opportunities to partner with state agencies in affordable housing schemes. If a uniform policy to deal with all these cases is indeed possible it will save considerable judicial time, legal expenses for litigants, and most importantly a collective approach for an industry-government partnership out of this mess.