Everyone waited for it to happen. Everyone knew it will happen one day. It has happened. An unprecedented trust deficit has creeped into the very foundation of an industry upon which rest the building blocks of all other commerce and business world – Real Estate.
Trust is hard to build. Easy to slip away. The 2017 Edelman Trust Barometer reveals that ‘Trust’ is itself in crisis around the world. The general population’s trust in all four key institutions – business, government, NGOs and media – has declined broadly – a phenomenon not reported since Edelman started tracking trust among this segment in 2012.
Unfortunately, real estate – often a bellwether for economic health of a country – is tunnel-visioned to be the bad boy and a big contributor to this declining trust in India. And this is when we – the industry and the government consider manufacturing Trust. RERA coming into picture for more transparency and for strengthening customer’s trust by way of putting approvals in order pre-sales, maintaining delivery records, insolvency directives for defaulters as well as the rise of Corporate Developers like Tata and Godrej is a step towards bridging this Trust GAP.
But, I don’t think manufacturing trust will beget seamless faith in the sector, or help achieve ‘Housing for all’ (And I have no political affiliations to this expression}. Bear with me a little more with this imperative trust issue. Most trust breaches occur when we skip transparency or accountability in the recording of the creation, capture, or transfer of value. Real Estate sector in India continues to remain utterly disorganized and non-transparent – Trust deficit was bound to happen. Some developers considering first to complete construction or at least the structure before heading out to sell is more of an attempt to evade RERA registration and escape GST implications rather than addressing the Trust Gap.
It is time to press Reset. Undressing has been ongoing for a while now. Verifiable transparency and accountability could be the answer.
Being the inside man, I believe The Blockchain Technology is an answer. It’s a system where one could abundantly trust data, information, organizations, governments and each other differently. This factored-in could change the experience of people interacting with the system forever 1 . The technology could be used to record the entire life cycle of a real estate project. It has already harvested success with other data sets, such as identity data, reputation data, inventory data, market data, agreement data, corporate data amongst others. All these data sets will go through the blockchain maturity model of first being trusted, then used to drive easy consensus, and eventually performing candidates forming the bedrock for autonomous actions.
To break it down, imagine a project – sorted to the ‘T’ and transparently recorded on an untemperable blockchain – right from the Title of the Land, to Approvals, to Built-up areas, to Material Specs, to brands to be installed through the finishing touch – with each and every document / agreement / contract duly executed and transparently shared / disclosed to existing and future stake holders including the end user buyers to the extent of even an ‘allpin’ mentioned (if still in use). The changes required, if any, would be easy and permissible as the ‘rules’ of the changes are also pre-loaded into the blockchain with Smart Contracts2.
Yes, self-executing and evolving binding contracts. This is when the ultimate Trust would stand the test of time, and people who will engage with it. The buyer need not verify the Said Trust with intermediaries, and as a failsafe have contracts enforceable in courts. Won’t it be better than resorting to short-vision gimmicks such as ‘Constructed and Sold’.
A reset is an action, a process, a mindset to do things differently. A reset occurs; sometimes by circumstance, sometimes by choice. In case of Real Estate, it will have to be both.
How we choose to accept, manage and design Real Estate Reset is entirely up to us.
