Unfinished Dreams: The Hidden Struggle of Homebuyers in Builder Insolvency

A home is not just a place—it is a dream built with years of savings and hope. But for many in India, this dream turns into a struggle. Paying EMIs for a house that is not delivered, while also paying rent, has become a harsh reality. Builder insolvency has left thousands of buyers stuck in uncertainty. 

Broken Promises by Builders 

The journey begins with trust—promises of timely delivery and a secure future. Buyers invest their hard-earned money with hope, but often these promises are broken. Funds get diverted, projects slow down, and deadlines keep slipping. In many cases, builders move on through new companies, leaving homebuyers behind—waiting, uncertain, and without answers. 

The Scale of the Problem  

This is not just an individual issue—it is happening at a large scale. According to the Insolvency and Bankruptcy Board of India, more than 7,500 insolvency cases have been admitted under the Insolvency and Bankruptcy Code, 2016 up to 2024, with the real estate sector forming a significant portion. While around 46% cases saw some resolution by mid-2024, only about 17% have been fully resolved in recent years (2025–26 trends). This means a large number of projects are still stuck for years. The problem is most visible in major cities like Delhi NCR (Noida, Greater Noida, Gurugram), Mumbai, and Bangalore, where thousands of housing units remain incomplete. These cities have become hotspots of stalled projects, legal disputes, and financial distress for buyers. 

Rights and Protection for Homebuyers 

The law has tried to protect homebuyers. Under the Insolvency and Bankruptcy Code, 2016, they are treated as financial creditors with rights in insolvency proceedings before the National Company Law Tribunal. The Real Estate (Regulation and Development) Act, 2016 also ensures transparency and provides a complaint mechanism. However, their effectiveness depends on proper and timely implementation. 

A Real Case That Shows the Reality 

A strong example is Pioneer Urban Land and Infrastructure Ltd. v. Union of India 2019, the Supreme Court held that homebuyers are “financial creditors” under the Insolvency and Bankruptcy Code, 2016, giving them the right to start insolvency proceedings and be part of the decision-making process. The Court also said this does not violate Articles 14, 19(1)(g), or 300A, and that the Code will prevail over the Real Estate (Regulation and Development) Act, 2016 in case of conflict This case was important because it gave legal recognition to the struggles of homebuyers. However, even after such judgments, many buyers still face delays in getting actual relief, showing that legal recognition does not always mean timely justice. 

Where the System Falls Short 

Despite having laws, implementation often fails. Insolvency cases take years due to delays and legal complexities, leaving projects incomplete. While institutions have a stronger voice, homebuyers struggle to be heard—this gap between law and reality causes the real suffering. 

What Homebuyers Should Keep in Mind 

Homebuyers should take basic precautions—verify RERA registration, check the builder’s track record, read agreements carefully, and avoid projects with delays or unrealistic promises. Timely legal action can also help. While risks cannot be fully avoided, awareness can reduce the chances of being trapped. 

Conclusion 

Builder insolvency is not just about incomplete buildings—it is about incomplete lives. Behind every stalled project is a family still waiting for a home. While laws like the Insolvency and Bankruptcy Code, 2016 and Real Estate (Regulation and Development) Act, 2016 offer hope, real change depends on accountability. Until then, the wait continues.