Rent Control Act
Rent Control Act – Rent Fixing & Eviction Rules
Rent Control Act has been implemented by the State Governments to consolidate the law relating to the property rental and eviction of tenant – for encouraging fair return on the investment by landlords and preventing undue harassment of tenants. Rent control act typically applies to rental premises that are let for the purpose of residence, education, business, trade or storage. In this article, we review the rental control act in detail.
Mostly Tenant Friendly
Rent Control Act enacted by the State Governments are mostly tenant-friendly and includes various regulations that protect the tenant from rent increase and eviction. Hence, the Rent Control Act abused by the tenants to continue to pay fixed rents, irrespective of inflation and the realty boom.
The abuse of the rent control act is one of the main reasons for the widespread prevalence of leave and license agreements in India. Leave and license agreements will be for a period of 11 months, with an option to renew the agreement at the expiration of the agreement. As a rental agreement that is 11 months long is just a license for the tenant to occupy the premises for a short duration, rent control laws do not apply.
Fixing Standard Rent under Rent Control Law
Most rent control laws have provisions for a court to fix standard rent and permitted an increase in rental each year. For instance, in the Maharashtra Rent Control Act, if an application for fixing the standard rent or for determining the permitted increase is made by a tenant, then the court grants to fix the same as per the rent control act. Also, the court can order the tenant to deposit the rental amount with the court and out of the money deposited in the court, make an order for payment of a reasonable sum to the landlord towards payment of the rent or increases due to the landlord.
A tenant could easily have a court intervene in the landlord-tenant relationship to fix a standard rent an acceptable increase as per the Rent Control Act. Hence, the fixation of standard rent is seen by most Landlords as being tenant-friendly.
Relief against Eviction
Rent control laws also have very strong provisions against the eviction of a tenant from a property. In Maharashtra, a tenant cannot be evicted if the tenant pays or is ready and willing to pay standard rent and permitted increases. Further, no suit for recovery of possession of the property can be initiated by the landlord against the tenant, until the expiry of ninety days after notice in writing, demanding the standard rent and permitted increase. Also, a court cannot pass a decree for eviction, if within a period of ninety days from the service of the summons, the tenant pays or tenders in court the standard rent and permitted increase along with 15% simple interest.
Hence, these provisions of the rent control act have been abused by tenants to stay in possession of the property – long after the request to vacate by the landlord.
Post by IndiaFilings
IndiaFilings.com is committed to helping entrepreneurs and small business owners start, manage and grow their business with peace of mind at an affordable price. Our aim is to educate the entrepreneur on the legal and regulatory requirements and be a partner throughout the entire business life cycle, offering support to the company at every stage to make sure they are compliant and continually growing.