Flaws in Rent Control Acts

The Flawed Nature of Rent Control Acts: The structure of various rent control acts renders them contradictory to other laws of the land in some situations: a) The law relating to the landlord’s rights to evict the tenant can be found in the Transfer of Property Act, 1882. While a landlord can immediately start an action for eviction of a tenant on expiry of the notice of eviction under Section 106 of the Transfer of Property Act, 1882, he cannot start such an action where the rent control act applies, unless he can prove the existence of one of the grounds of eviction under the Rent Act. b) Some provisions of these acts have been repeatedly denounced by the courts as unreasonable. E.g. The Supreme Court, while delivering its judgment on December 19, 1997 on appeals filed by several property owners in Mumbai, said that the existing provisions of the Act that related to the determining and fixing of the "standard rent" were "no longer reasonable". c) The various acts relating to the control of accommodation in urban areas including the Rent Control Acts are examples of legislation interfering with the right to hold and dispose of property under Article 19(1)(f) of the Constitution of India. But such Acts exist because they are considered to be necessary in public interest in times of shortage of houses. Poorly written Acts: The following observations clearly highlight the fact that most of the states’ Rent Control Acts are poorly written and thus their implementation is bound to be problematic. • In many states tenants are not even entitled to get a receipt from the landlord on payment of rent (refer to Annexure 6, column 3). The right to receipt on payment of rent is an essential right of any tenant and also, the foundation of the tenants’ right to seek justice in court of law. • In several states, the landlord is entitled to make alterations or improvements to the premises without the written consent of the tenant. These improvements, in turn, entitle him to increase the standard rent .This means that the landlord, despite the unwillingness of the tenant, can make structural alterations to the premises and claim an increase in rent. • A clear position on inheritance rights is essential for any legislation governing property rights. But strangely, Karnataka is the only state in India, which has provisions for inheritance of tenancy in its RCA. • Too much in the acts is ambiguous and is left to the interpretation of the user. Phrases like ‘basis of’ and ‘bona fide’ are used very often. • Despite having adapted ‘second generation rent controls’, only a handful of the states actually allow for periodic, unconditional increase in the standard rent. These are just some examples from a plethora of discrepancies present in our rent control acts. Working towards an improvement in the state of these laws can prove to be a stepping-stone towards the desired end of complete deregulation. Thus, instead of incessant rhetoric about complete and immediate deregulation, what is needed is a methodical approach towards reforming the existent rent control laws. And instead of relying completely upon examples of other countries where deregulation has worked, empirical research and quantification of the relationships needs to be done between the various factors working behind the scenes in the rental housing market in India, and the impact deregulation is likely to have on these factors. -Hyderabad Tenants Blog

The Legal Aspects of Rent Control

The Legal Aspects of Rent Control :

Under the Indian Constitution, housing is a state subject. Thus, the enactment and enforcement of rent control laws is the responsibility of the individual states. While this is in accordance with the federal nature of the Indian Republic, it makes a comparative analysis of the rent control laws that much more difficult.

The common thread running through almost all rent control Acts and legislations is that they are intended to serve two purposes:

1. To protect the tenant from eviction from the house where he is living except for defined reasons and on defined conditions; and

2. To protect him from having to pay more than a fair/standard rent.

But most acts also confer upon the landlord the right to evict a tenant who is guilty of certain specified acts and also when the landlord requires the house for his own personal occupation. There are various grounds under which a landlord can evict a tenant. The most common of these are listed below. There are also some states, where one or more of the provisions given below don’t apply.

1. Breach of condition of tenancy 2. Subletting 3. Default in payment of rent for specified period 4. Requirement of building for own occupation 5. Material deterioration in the condition of the building

The landlord is required to specify the exact provision of the relevant act under which he is seeking the eviction of the tenant, to enable the tenant to take any remedial action provided in the act.

The whole idea of a rent control act is to control and regulate eviction of tenants and not to stop it altogether.

-Hyderabad Tenants Blog

Rent Control Acts

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Rent Control Acts

People staying in Hyderabad from the past 10 years have all witnessed the rapid growth of thePearl-city to Cyber City. There are many issues/challenges that the city and the people living in the city face in this continuous development phase. The concern here is we always fail to win over the issue or challenge we face and just try to by pass for the hour. And that’s the reason we are still developing.

Well, Lets address one such issue the city and the people of the city are facing, which is the motive behind this blog: Unsystematic increase in Rents – This is a mammoth problem in any city which is accelerating in the phase of development. Lets try to find out a way to control this problem by answering a few important questions.

How to control the increase in rents? Is there any Law or Act which can help us out? If yes what does it say? How can it help? What are its flaws?

I have tried to find answers for the above questions and succeeded in getting substantial information.

Below is the information regarding the Rent Control Act.

What is rent control?

The practice of imposing a legal maximum (rent ceiling) upon the rent in a particular housing market, below the equilibrium rent is called rent control. If this maximum is above that market’s equilibrium rent (different rental housing markets may have different equilibrium rents), then the control is null and void. But if the rent is set at a level below the equilibrium rent, it will necessarily lead to a situation of excess demand or shortage. In a free market, prices (here, rents) would rise automatically filling the gap between the demand and the supply. But rent controls prevent prices from rising up to the equilibrium level

Does India have a Rent Control Act?

The first rent control legislation in India was introduced immediately after the First World War in Bombay in 1918. It was followed by similar legislations for Calcutta and Rangoon in 1920. By the end of the Second World War almost all the major cities and towns in the countries were covered by rent control measures. All these acts, born out of the inflationary aftermath of the First World War, were conceived as purely temporary measures to provide relief to the tenants against the demand of exorbitant rent and indiscriminate eviction by the landlords due to scarcity of houses in the urban areas.

As in other parts of the globe, the rent control laws applicable in various states in India are different with respect to various aspects and thus, a holistic analysis, though attempted here, is difficult.

-Hyderabad Tenants Blog

Read This: The Legal Aspects of Rent Control