Real Estate – Do Morals Matter?

Issues:

1. Financial difficulty

• How would a bank deal with this scenario
• How should a PropCo balance its responsibilities to its shareholders, lenders, tenants, community etc
• Is there any ethical framework to help make the right decision?

2. Ethical business practice

• Does a vendor have a moral duty to disclose a physical or legal defect in a property?
• “My word is my bond” – if you agree terms to sell a property and before contracts are exchanged receive a higher offer – what is your duty to your shareholders, to your purchaser, to yourself?
• Chipping away – it has become custom and practice to agree terms and then to find a defect in the property or title and use this as a lever to chip away at the price (gazundering) – if everyone is doing it, shouldn’t you?

3. Property and the High Street (with the recent riots in mind)

• Do individual property owners have an interest beyond maximising the value of their own asset?
• Is “unfettered capitalism” and the relentless growth of the supermarkets fuelling the breakdown of our social fabric?
• Does the property industry have a responsibility to communities and to foster social cohesion?