Realty Bites: A journey through India’s most controversial sector

It takes courage to stand in a cess pool and proclaim that the water feels good or, that with a little treatment or with the entry of cleaner people, the swim could become enjoyable. The author of the book under review specifically admits that “real estate is a cesspool of corruption and irregularities,” and asserts that this situation needs to and can improve.

Real Estate, Entitlement, Inheritance, land-grabbing… all lie between two extremes. At one end, the philosophical question enshrined for all eternity by Leo Tolstoy: How much land does a man need? The other end holds the insatiable greed of realtors. English dictionaries restrict the term “realtors” to “Estate Agents”, which translated to the Indian context means “brokers” – a profession so rightly named since the main purpose of the profession appears to be to leave at least the buyer, “broke”.

Be that as it may, the term – realtors – should cover all those who profit from dealing in real estate: the developers and builders (by whatever name called), the administrative authorities responsible for, but failing to look into, the sustainability of projects in terms of ecology, pollution, water supply and sewerage aspects, safety standards, clearance of slums left behind at the projects, local sentiments, privacy of existing occupants, the registration of deals, and not to forget, the effective implementation of labour laws. Our cess pool has too many pollutants pouring in and none of them are controllable.

Realty Bites: A journey through India’s most controversial sector

The cases of Adarsh Housing Society and the Campa Cola Compound, the hyphenated horror of home loans in the US around 2008, the VIP related scams in India featuring several unmentionables are all but the flotsam; the muck is deep and pervasive. And yet Suhsil Kumar Sayal would have us believe that there is hope for the real estate sector to be “cleaned up’.

Why then has Sayal chosen to relate his book to “UNreal” Estate? The title is meaningless. Perhaps the subconscious statement here is that the whole argument for honesty in the field is “unreal”. The Foreword by Sunil Bharti Mittal has but one impressive observation, which is about the “informed choices [we have to make] to achieve the desired trade-offs andbuild sustainable cities.”

In the Preface, Anuj Puri of JLL India, says: To carve a niche in this highly unorganized business arena is comparable to building on shifting desert sands – impossible formost, yet those who succeed leave monumental pyramids in their wake. Puri forgets that the Egyptian and Aztec pyramids arose out of near-divine assignments and were built from knowledge that came down from “intelligence” that modern man is yet to comprehend. Real estate deals of today (with a handful of exceptions) are not worthy of comparison.

But, insists Sayal in his introduction, “nobody … was prepared to believe that the business of real estate could be carried out in a clean andtransparent way”, he felt “that somebody had to set the record straight”! And that, dear reader, justifies the book.

Among the corrective measures, Sayal lauds the Govt initiative for legislative control. The Benami Transaction (Prohibition) Bill promised by the Finance Minister on 28th February, 2015, is mentioned; it was expected to amend several provisions of the Act of 1988 but is yet to see the light of day.

The approval of RBI for Real Estate Investment Trusts is also brought up – with much hope. The effort of the UPA Govt in 2013 in tabling the Real Estate (Regulation & Development) Bill [now, Act of 2016] is praised for its aims of addressing“much of what ails the sector”. However, it is pathetic to note the author’s sentiments about the Regulator proposed under this legislation.

“Now with the regulator in place,” he says,” which will hopefully protect the interests of the investors, it is hoped the builders will put pressure on the states to introduce transparency.”(Emphasis added). The builders want transparency from the State? That’s a new one!  What about a hope for the buyer? If the reader attributes naiveté to the author it would be out of sheer generosity.

Further, the selection committee of the Regulator is made up of the Chief Justice of the High Court and the Secretaries of the Departments dealing with Housing and Law. Here’s more scope for bureaucratic backscratching: with a long history of cases like Adarsh in Mumbai, the flyover in Kolkata, the umpteen building collapses all over – and here we have bureaucrats selecting the committee which will regulate those very same bureaucrats!

Compatibility of the worst kind  is guaranteed in the enactment itself. The persons so selected should possess “adequate knowledge of and professional experience of” at-least (sic) twenty years for the Chairperson and fifteen years for the Members in urban development, housing, real estate development, etc..  If these candidates were civil servants, they ought to have held the posts of certain levels in the Govt of India or Govt of a State. If not a civil servant, “professional experience” in the fields mentioned is all that is stipulated. At least the framers of the Right to Information Act, 2005, stipulated “eminence” (the interpretation of which depends on the political dispensation in the States) in various areas; this Act dispenses with the requirement of eminence altogether.

The reader looking for “insights”about this cesspool will be disappointed. It is an entertaining book, calling for indulgence and generosity of the discerning reader. What is, however, striking in the entire book as well as in the Real Estate (Regulation & Development) Act, 2016,is the total failure of everyone concerned in addressing the issues related to construction labour – who are in the worst corner of this polygonal relationship.

Sayal concludes the book on a hope which can only be shared by those at his level of ingenuousness: “Once demand and supply are evenly matched, once strong corporations begin to play a dominant role in the sector, once a strong and active real estate regulator is introduced, and [once] rules become transparent, this business will only move from strength to strength.”

(Emphasis added). Does the builder lobby need more strength vis-à-vis the hapless buyer and / or the defenceless construction labour? The buyer’s life-time savings. The migrant labourer’s empty tomorrows. There is nothing “unreal”here. The reality of real estate catches up with all of us in insidious ways. Sayal’s pious claims cannot help in assuaging our losses, or our fears.

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