Real-time ethics in the real es­tate busi­ness

An eth­i­cal re­alty firm en­sures that all busi­ness in­for­ma­tion is hon­estly and ac­cu­rately recorded and re­ported

HT Estates - - HTESTATES - Anuj Puri

We keep talk­ing of eth­i­cal real es­tate busi­ness. Is a ‘code of ethics’ just a fancy man­i­festo you put on your of­fice wall? Does it mean that the com­pany merely steers clear of il­le­gal deal­ings? If that was all there was to real es­tate ethics, it wouldn’t be say­ing much. Af­ter all, thanks to In­dia’s rather un­clear legal sys­tem, it is pos­si­ble to fol­low the path of dis­hon­esty and self-in­ter­est with­out ac­tu­ally do­ing some­thing il­le­gal. I have al­ways thought that in real es­tate, the legal way can of­ten be the low­est stan­dard.

The fact is, un­eth­i­cal prac­tices in real es­tate are the prod­uct of a short-term, mer­ce­nary ap­proach to the busi­ness. This phe­nom­e­non is most ev­i­dent in smaller bro­ker­ages, which of­ten have no more than a sin­gle deal­ing with many of their cus­tomers.

I’m not say­ing that all small bro­ker­age houses are un­eth­i­cal (I per­son­ally know a num­ber of small op­er­a­tors whose busi­ness meth­ods are com­pletely above re­proach. They know that good ethics equals good busi­ness). What I’m say­ing is that a pro­fes­sional real es­tate com­pany that takes ethics se­ri­ously, views and treats ev­ery new prospect as po­ten­tial long-term client. When ev­ery real es­tate deal is re­garded as the first of many to fol­low, eth­i­cal con­duct tends to be­come a nat­u­ral by-prod­uct.

An eth­i­cal mind- set can­not be en­forced. It comes as a re­sult of a higher aware­ness of how busi­ness works best in the cur­rent times. The In­dian real es­tate mar­ket was no­to­ri­ous for its lack of trans­parency, but that is chang­ing rapidly. The larger prop­erty con­sul­tan­cies are han­dling a num­ber of in­ter­na­tional clients now – clients who are ea­ger to en­ter or ex­pand op­er­a­tions on the In­dian sub­con­ti­nent. Such clients have high stan­dards in terms of ser­vice qual­ity and clar­ity, and are of­ten jus­ti­fi­ably wor­ried about be­ing taken for a ride by un­scrupu­lous op­er­a­tors. All they ini­tially have to de­pend on is the tan­gi­ble, ver­i­fi­able eth­i­cal ap­proach of their real es­tate part­ners on this end.

So, what con­sti­tutes eth­i­cal real es­tate busi­ness prac­tices in real time? I can’t cover all facets of eth­i­cal busi­ness con­duct here; some per­tain to clients, oth­ers to em­ployee con­duct and yet oth­ers to gov­ern­ment au­thor­i­ties. How­ever, it is the way in which one deals with clients that makes or breaks vi­tal busi­ness re­la­tion­ships. To be brief, I’ll fo­cus on this as­pect here.

Among other things, a eth­i­cal real es­tate com­pany en­sures that all busi­ness in­for­ma­tion is hon­estly and ac­cu­rately recorded and re­ported in com­pli­ance with ap­pli­ca­ble laws. It also has strict rules against bribes, kick­backs and bar­ter­ing ar­range­ments, or any other in­cen­tives of­fered to ob­tain or re­tain busi­ness. In ad­di­tion, it scrupu­lously avoids all im­pro­pri­eties or con­flicts of in­ter­ests, and has a strong pol­icy against in­sider trad­ing.

Eth­i­cal busi­ness prac­tice also means that a real es­tate com­pany does not sep­a­rate the pur­chaser and the buyer to cre­ate ad­di­tional busi­ness ad­van­tages. Like­wise, it will not at­tempt to pres­sure a client into mak­ing a de­ci­sion, or pro­vide any kind of mis­lead­ing in­for­ma­tion to prompt a de­sired de­ci­sion.

THINKSTOCK

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