The rent control act was first passed in 1948. It assumes first priority and is the most popular among tenancy laws in India. It spells out the terms and conditions through which the landlords can rent a property and tenants can avail the habitation rights. It is the most detailed among various rental laws in India. The agreement ensures that the rights of both the parties are preserved. Different types of States usually have different types of rent control acts but follow a uniformity in terms of various clauses.
As the 1948 rent act was the first of its kind, it was bound to have various lacunae. Various clauses of the act were very much in favor of tenants. The problem was that it acted as a major hurdle towards the growth of the real estate market.
Rental Agreement
Whenever the landlords decide to rent a residential building or a commercial property, it has to be guided by certain rules and regulations spelled out in the Rent Control Act.
The first important clause notes the need of an agreement between the parties clearly mentioning the terms and conditions therein. It needs to be noted at this point in time that the validity of the agreement can be in ambiguity if it is not in written format.
The written form of the agreement is essential because it takes into account all the changes and revisions. It is the written form that guarantees the authenticity of the agreement. Only a written agreement can be registered and enforced under law.
Hence, it is highly recommended to consult a legal practitioner who can note down the rights and duties of both the parties and formalize them into a written agreement.
Rights of a Tenant
The Rent Control Act guarantees equal rights to both the landlord as well as the tenant. Some of the important rights under this act are mentioned below:
It is important for the landlord to have sufficient cause to evict the tenant without any prior notice. There is a lot of variation in the rules of eviction of tenants in different states. In some of the states, the rules of eviction are tougher than the others. In some of the states, it is mandatory to acquire a court order to evict the tenant while in other states it is not.
The landlord cannot charge a very high amount of rent from the tenant under the rent agreement rules. The rent charged must be fair as well as competitive. It should be advantageous to both the landlord and the tenant. The value to be charged from the tenant should be equal to the market price of the property. If the tenant feels that he is being charged an amount in excess of the fair price, he can approach the court to redress his grievances.
Rights of a Landlord
The rights of the landlord are specifically mentioned in the Rent Control Act and some of the important rights are mentioned below:
- The first important right enjoyed by the landlord is to evict the tenant whenever he likes but the eviction should be on valid and reasonable grounds. The right to eviction is not a guaranteed right in some of the states. While it is easy to evict the tenant in some states, in others it is difficult. One of the reasonable grounds for eviction of a tenant is the proposal of the landlord to reserve the place for his own living.
- The second important right enjoyed by the landlord is to charge a reasonable rent from the tenant. It is highly likely that the qualitative aspect of the term reasonable may differ from state to state and as per various house rent rules in India. The situation is further compounded as there is no upper limit on the reasonable rent that has been fixed. It is in this context that a landlord needs to exercise this right carefully. It is expected that the landlord should not increase the rent exponentially but should limit himself to an increase of 5 to 8% year on year.
- The third important right enjoyed by the landlord is to repossess the property for a particular period of time if he feels that maintenance to the infrastructure is required. He can also initiate certain changes in the property but it is expected from him that he takes care of the residency as well as other rights of the tenant during the period.
Non-Applicability of the Rent Control Act
The rent Control Act is inapplicable in certain circumstances. These are briefly discussed below:
- Whenever the property is leased to a public or a private firm that has a paid-up capital of about 1 crore, the Rent Control Act ceases to apply.
- When the property is leased to public sector enterprises or entities like banks and corporations, the legislations pertaining to the Rent Control Act can’t be applied.
- Whenever the property is leased to foreign companies that have well established international operations, the Rent Control Act cannot be applied.
Features of the Rent Control Act
The aim of the rent control act is to regulate the increase in rentals and safeguard the rights of both the tenant and the landlord. Some the most important features of the rent Control Act are mention below:
- By virtue of the Rent Control Act, different laws have been legislated and these laws play a pivotal role in helping the tenant to identify a particular property for the purpose of accommodation.
- It is because of the Rent Control Act that a fair amount of control has been established on the rentals that are charged by the landlord while renting out a particular property to the tenant.
- By virtue of the Rent Control Act, the tenants enjoy the security aspect as they cannot be forcefully evicted by the landlord unless under extraordinary circumstances.
- In addition to this, the different clauses of the act highlight the rights, duties and obligations of both the landlord and the tenant thereby making the entire process of letting out a property very smooth and regulated.
The bottom line
This article aims to give a gist of the various features of the Rent Control Act and serves as a guiding document for landlords who want to let out a property as well as the tenants who want to accommodate that property.
Cooperative Housing Society