All
transactions in Indian real estate sector
are governed by various laws enacted by the Central Government of India and
respective State governments. One such law is the RENTAL LAWS.
These laws govern the rental of commercial and residential property and are
necessary to enforce individual civil rights of both landlord and tenant and
prevention of any kind of deceit.
The
real estate scene in India is flawed by land market distortions. The most
glaring ones include inflexible zoning, rent and tenancy laws. Zoning laws,
rent controls and protected tenancies have been detrimental to the healthy
rental trends in India. They have put a freeze to land in city centers that
could be otherwise made available for new retail outlets and flats.
These
laws also gloss over operational inefficiencies and scuttle competition.
Tenants residing could not be evicted for along time and would not surrender
their cheap tenancies on their own volition. The renovation of buildings could
hardly happen. One such act favoring the rental property market in India is the
Rent Control Act.
Rent
Control Act
Rent
Control Act was an attempt by the Government of India to eliminate the
exploitation of tenants by landlords. Rent legislation tends to providing
payment of fair rent to landlords and protection of tenants against eviction.
But the allowances have been very generous and hence tenants residing in rental properties in India since
1947 continue to pay rents fixed then, irrespective of inflation and the realty
boom.
The
Rent Control Act has led to several adverse situations like languishing investment
in rental housing, withdrawing of existing housing stock from the rental
market, stagnating municipal property tax revenue. The rent control along
with security of tenure has not given any encouragement to house owners to
renovation their houses and most houses as a result have a worn out look.
Repeal
of the Rent Control Act would lead to construction boom and meet the growing
need for housing and aid employment generation. There will be more rational use
of prime locations and will set off a continuous process of urban renewal.
In
1992, the Central Government proposed a model rent control legislation,
which was meant for and circulated to all states. The model Act proposed
modification of some of the existing provisions on inheritance of
tenancy and also prescribed a rent level beyond which rent control could not
apply. The New Delhi Rent Control Act that was passed in 1997 was based
on this but failed to be notified due to resistance from traders who are
sitting tenants. Very few states have introduced the model Act.
The
new Maharashtra Rent Control Act, Delhi Rent Control Act, Tamil Nadu
Rent Control Act, Karnataka Rent Control Act all has provisions for
the dispute among the landlords and tenants. Each of the State Rent Act
provides for fixation of Standard Rent as well decree for possession and
provisions that lay down the satisfaction of the Court.
Rental
Agreement is an integral part of rental law
Rent or lease of a residential or commercial property in India is subject to strict Indian laws. A mutual agreement on the terms and conditions of the rented property by the landlord and the tenant is required. In the present times, leasing a commercial space in India as opposed to owning commercial real estate is turning out to be a brilliant move.
Rent or lease of a residential or commercial property in India is subject to strict Indian laws. A mutual agreement on the terms and conditions of the rented property by the landlord and the tenant is required. In the present times, leasing a commercial space in India as opposed to owning commercial real estate is turning out to be a brilliant move.
Professional
legal advice becomes a necessity as there are fewer tenant-friendly laws in the
area of commercial leases, and no standard lease agreements. A lawyer’s help
will be useful for making an informed decision in negotiating the best deal on
a commercial lease as he/she can research zoning laws and local ordinances and inform
you about local real estate market conditions and customs.
A rental
agreement refers to a relationship between the landlord and the
tenant. It is legally binding upon the parties. It may be brief, or it
may have extra conditions or obligations. However, any changes or
additions to a rental agreement should be maintained in writing. The
rental agreement is a ‘Legal Form’ which has to be completed, signed and dated
by the tenant and landlord. There are leases and rental forms for renting,
leasing and managing residential rental properties. Both the parties must have
access to the document once it is signed.
The
landlord should get the agreement registered. The landlord must give the tenant
a duplicate copy of the rental agreement, failing which the tenant is not
obligated to pay rent until the tenant receives a copy of the rental agreement.
In Conclusion
The
rental laws in India need to be revised to protect the owner and his/her
property from the tenant.
·
Special
areas of focus should be on terminating old tenancies, removing constraints on
increase of rentals and empowering owners in the sense of being able to reclaim
their properties without any court proceedings.
·
The
market forces should be allowed to determine the rental amounts and the owner
must have full protection for his/her property. This will go a long way in
providing security to the landlord and also reduce the deposit amount required
with the lease agreements.
If
these laws are enacted and strictly enforced, there is every chance that more
investors will want to enter the real estate market to utilize the rental fees
as income. This is especially true for the commercial sector. The tax laws also
need to be revised so that renting of properties becomes a financially viable
option. Amendments in the Rent Acts of several states are a progressive
move.
Originally published on: Indianground.com
3 comments:
Why should tenants feel that they have to put themselves down when they talk about their homes?
Part of the reason is our tenancy laws.
Our laws allow landlords to terminate tenancies without grounds this is unfair and makes all tenants insecure.
Our laws allow excessive rent increases and other fees, and interference in tenants’ decisions about how to live their own lives.Our laws don’t do enough to raise the standard of rental housing and make it safe.
And it’s even worse for people in marginal rental accommodation some of the most vulnerable members of the community – who are excluded from our tenancy laws altogether.i remember a news which i read few months back that a tenant was evicted after complaining about a plumbing problem lost his court case, but each year tenants do suffer 'revenge' evictions. This has to stop.there must be a balance between the owner and tenant
sir on the same issue i read an article in bengaluru mirror where the problem faced by tenant is discussed that they have to pay 10 months deposit in advance n if the tenant does not pay for 1 month he can be thrown out of the house but there are no such rules for the landlord . they can ask u 10 months rent in advance, charge u for even small rear and tear and many of the cases even the deposit is not returned saying that money will be used to rennovate the house. t solve this issue Tenancy Act 2011 (a proposed act), suggests not more than three months' rent as deposit and a host of other tenant-friendly rules that would benefit both, owners and tenants, alike.but this act has still not been passed
Sir,
A few months back I read about tenancy bill2015 soon tabled in parliament.
If proposed model of tenancy bill 2015 comes into action, then to an extent this problem might get solved.
It proposes an independent authority for registration of all tenancy agreements and a separate court for resolving disputes, a major problem in a country where thousands of rent-related litigations are pending in courts.
Currently, almost all states have their own rent laws. But many of them have become archaic and failed to serve their purpose. The opaqueness has not only made renting out properties a tricky affair for landlords but taking a house on rent has become a nightmarish experience too. Many tenants are forced to face up arbitrary rent hikes or face eviction.
The move will bring relief to landlords of old properties in many cities, including Delhi, saddled with tenants who have been paying rents fixed over six decades ago.
There are safeguards for tenants as well. They won’t have to live in the fear of getting evicted at the whims of the landlord.
Now the question is this proposed draft will able to step soon or not?
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