How the Rent Control Act Protects Tenants Rights

By : 360 Realtors

28 June, 2016

Rent Control is a system of imposing a rent ceiling on the rent of all types of housing markets so as to maintain equilibrium in the economy. Owing to the Rent Control Act, the prices of rental accommodations can be prevented from rising up suddenly or creating a situation where the supply is less than the demand.

The Rent Control Act in India came out in 1947 and post these respective states have taken amendments/modifications to the Act primarily states like Maharashtra, Karnataka and New Delhi and the others are more or less following the similar system as these states. Taking a recap of all the years that have gone by, the Rent Control Act has been advantageous to the tenants in protecting the tenant rights in many ways. Here is how:

1. Fixation of 'fair' or 'standard' rent
The rent of the premises is adjudged by the landlord, however, the parameters of the existing rate in the market and the maximum ceiling as determined by the Government have to be considered before fixing the rent. The agreement for a period of 11 months does not allow any modification to be made in the rent without the consensus of both the parties involved. Once the period is over and there is a mutual agreement on increasing the association, the landlord can increase the rent by five percent per year followed by four percent in the successive years. This increase will always be in spite of the inflation which may be up to 20 percent in a year.

How it helps the tenant:These guidelines prevent the indiscriminate increase in the rent of the property as per the desire of the landlord. From the tenant's perspective, he is safeguarded from the uncertainty of the financial implications of the rental accommodation in the coming years.

2. Providing protection to the tenants from indiscriminate eviction
As per a judgment passed by the Supreme Court in 2011, a landlord cannot indiscriminately evict a tenant for a period of five years if the rent was paid by the tenant on time at all junctures. In the past, there have been many disputes and litigations arising out of the premise that landlords evict tenants over the prospect of getting a better rent than what is being currently paid. The eviction stands legal only if the owner is occupying the premises for his own use.

How it helps the tenant: It helps the tenant in the following ways:
The landlord is not entitled to recover the possession of any part of the premises if the tenant is willing to pay the rent and abides by the standard rent increase norms.
No suit can be filed against the tenant on the grounds of nonpayment of rent until the 90 days notice of a written demand sent by the landlord expires.
In case a court passes an order for eviction, rent recovery @ 15 percent gets imposed after the 90 day period post the notice.

3. Chalking out the duties of the landlord with respect to the maintenance of the rented properties
Very often, there has been a confusion over the duties of the landlord and the duties of the tenant with respect to the premises. The landlord's argument is indicative of the fact that the residents should be liable for any repair work whereas the tenant's perspective calls for repairs to be undertaken by the owner of the property. As per the Act, it is the landlord's responsibility to keep the house in good and tenantable form. A tenant can serve a notice of fifteen days to the landlord to this effect if the landlord neglects the demands of the tenant. The Act also provides the provision for the landlord and the tenant to share the financial burden of the repair. It also gives the flexibility to the tenant to carry out repairs in case of continued neglect by the landlord and deduct the cost incurred from the rent payable to the landlord. The only condition that applies is that these repairs should not exceed by one-fourth of the total rent payable for that year.

How it helps the tenant: More often than not, tenants have the habit of overlooking repair work of the property since he is not the affected party here. This puts an end to such squabbles and legal fights between the landlord and the tenant.

4. Formalizing a Leave and License Agreement
The Rent Control Act specifies the need of legalizing the process of interaction between the landlord and the tenant with respect to renting of a property. As per Section 55 of the Maharashtra Rent Control Act, 1999, all the agreements must be in writing and registered under the Registration Act, 1908. This responsibility rests with the landlord and if he is unable to create this document and get it registered and then the contention of the terms and conditions will lie with the tenant, until proved otherwise. Absence of the leave and license agreement can also lead to imprisonment of the landlord for three months or a fine of rupees five thousand or more.

How it helps the tenant: Legalization of a process is always beneficial lest the matter gets disputed and intervention from the court is sought. Since the prerogative of the same lies with the landlord, the tenant can be rest assured of the legal standing of the premises he would be residing into and about the credibility of the landlord.

5. Stating the right of legal heirs of the tenants
In case of a situation where the tenant dies, his legal heir automatically becomes the tenant of the premises. Rent Control Act of various states has adopted this rule so as to minimize litigations arising out of rights of occupancy of the rightful tenant. Further to this, the onus of whether or not the contract will be renewed with the landlord rests with the new tenant. At this point also, the landlord cannot evict the tenants, as per the law.

How it helps the tenant: The new tenant and his family can continue to reside at their existing premises. A new leave and license agreement needs to be created after the expiration of the old one with the name of the new tenant, responsibility of which lies with the landlord.

Apart from these, there are many provisions in the law for the landlords also. The tenant is not at the short end of the stick all the time and it is the landlord also at times who need support in form of laws. Overall, The Rent Control Act has managed to keep the system streamlined for a long period of time. While the exact laws may differ from state to state, the overarching objective remains the same.

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