REAL ESTATE IN INDIA: THE LIE OF THE LAND
MD of Bharti Realty, Sushil Kumar Sayal has tried to show that realtors do not have to resort to illegal means to grow in business
Ethics and real estate can go hand in hand. While this might be an alien concept in the real estate business, it is the message that Sushil Kumar Sayal, MD, Bharti Realty, tries to put across in his book ‘Inside unreal Estate: A Journey Through India’s Most Controversial Sector” that covers his own thirty-year career in the industry.
While accepting the general perception of the real estate sector as a breeding ground for cheating, fraud and corruption, Sayal has tried to show, through his own example, that a realtor does not have to resort to illegal means to grow in business. To some extent, he has been successful.
“Having always played by the rules, I felt it was important to tell my story; a journey of over three decades, where things got done only the way they should,” writes Sayal while introducing his book.
He refers to realty scams like the ones to do with Adarsh Housing and Campa Cola Compound to highlight the nexus between politician, bureaucrats and realtors that cheats gullible buyers.
While developers shy away from talking about the unregulated aspects of the real estate sector, Sayal courageously acknowledges that the bureaucracy deliberately keeps realty rules complex. “If all the rules are simplified, they (bureaucrats) will be left with no discretionary power. And nobody wants to give up power – and the money that comes with it,” he writes.
This 196-page autobiography focuses on Sayal’s middle class upbringing, beginning his career with Ansal Properties and Industries where he was paid R 690 per month, his later stint at The Great Eastern Shipping Company before he started his own asset management venture Alpha G Corp, and finally settling down as MD of Bharti Realty. Along the way, he says he learnt lessons of honesty and humanity from his colleagues.
In his leadership roles, Sayal undertook all kinds of realty projects including residential, commercial, retail and township and delivered them within the committed time frame following construction laws and business ethics.
Besides bashing developers for not adhering to the rule of law, he cites instances to show how officials go scot free even after abusing their position while developers get caught and homebuyers suffer.
He reveals that he realized that the bureaucracy could make life difficult for a builder while developing a mall in Amritsar. The mall was, apparently, constructed on time but was refused a completion certificate by the commissioner, who insisted that the authorities had forgotten to charge a fee of Rs 14 crore while approving the structure. Sayal approached the high court and got relief. However, the court asked his company to furnish a bank guarantee of Rs 14 crore.
“The opportunity cost for us had not changed at all. There is a need for the political leadership, and the bureaucracy, to be aware of business realities. It is unfair on their part to wreak havoc on investments,” he says.
“Even the top decision makers in the government get their cut from illegal deals with builders,” he says touching upon the crux of the problem. “All the violations in the sector can stop immediately if authorities decide to enforce the law properly.”
Unfortunately, the fate of his own company, Alpha G Corp, belies his philosophy of honesty in real estate. It might have been great for his individual growth, but Sayal has not really succeeded in showing that a company with completely honest dealings can survive in real estate.
“We had made the company a model for others to follow in terms of project execution and delivery and ethical practices but Alpha G Corp was starved of capital which meant the growth prospects weren’t bright – neither for the company nor for the senior leadership team,” he admits. One reason for his company’s bad financial health was its refusal to accept cash from homebuyers.
Many rightly disagree with Sayal’s notions about big corporations entering the real estate sector. While he believes the erosion of trust in conventional builders, some of whom were fly-by-night operators, gave reason and hope to business houses, especially those with a strong corporate image, to enter the sector, ground realities suggest otherwise.
Corporate houses enter the realty market sensing huge profit margins. So instead of setting down healthy practices such as balanced builder-buyer agreements or sale on the basis of carpet area, corporate houses too have exploited the weakness of the sector to serve their own interests.
A recent instance is a corporate group’s luxury project on the Dwarka Expressway in Gurgaon. It was not only delayed for more than a year, it offered possession without electricity or a water connection!
In the end this is a well-meaning book but one that doesn’t follow through on its promise to show that it’s possible to flourish in the real estate sector in India while also being completely honest and ethical.