NEW DELHI: The Union Housing Ministry is re-working on an abandoned 2011 draft bill of the UPA government for giving an upper hand to the landlords over tenants, superseding the 1948 Rent Control Act adopted by the most States and which provides protection to the tenant’s interests.
The new law will empower the landlords to not only charge market rates from all tenants taking premises for residence or commerce but also raise the rent periodically and get the premises vacated without getting into the long-drawn court battle.
The Rent Control Act that will be superseded by it applies only to tenancy of more than 12 months, generally puts a cap on the rent and makes it very difficult to evict a tenant who refuses to pay the revised rates even after long years of occupancy.
The proposed new law, however, will be only a model law, which is not binding on the States as they may adopt it or continue with the old laws that are favourable to the tenants. It will be also named so — Model Tenancy Act. It is not clear how the Centre intends to make the States adopt the new law. In 2011, the UPA government had tried to arm-twist the States that only those States adopting it would be eligible for funding under the Rajiv Awas Yojna, a housing scheme for the slum dwellers.
The new law will put an end to the malpractice of the tenants taking premises by paying any rent the landlords demand and then refuse to vacate or sign a fresh agreement on completion of the lease period, forcing the landlord to move the court for eviction. The new law will enable the landlord to serve a notice on the tenant three months before expiry of the old agreement, specifying his terms and revised rent for a new agreement. If the tenant does not accept them, he must serve a termination notice to leave the premises when the old agreement expires or else it would be assumed that he had accepted the new terms.
For the existing tenancies, a 12-month grace period will be allowed before a new agreement has to be signed, with two months’ notice on either side. In the new law, there will no minimum or maximum period of tenancy except as per the agreement. While there is no check today on the security deposits many landlords demand, while the new law provides for a ceiling of three months of rent as the refundable security deposit, which has to be refunded within one month of the vacation of the premises.
The new law would also provide for the landlord’s right to enter a rented property, though only after serving a 24-hour notice and that too only between 7 am and 8 pm. At present, there are no rules when a landlord can enter the rented premises.
While the present law requires registration of the tenancy agreement with a notary public, the new law will require registration with the State-appointed Rent Control Authority. The new law will make it mandatory not to rent out the premises without registering a written tenancy agreement with this authority, which will also entertain cases for settlement of disputes on revision and fixation of rents. However, if the landlord wants to evict a tenant for defaulting on rent, he will have to approach the rent court.
