What is the Rent Control Act of India?

Rent Control Act
Real Estate » What is the Rent Control Act of India?

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Rental laws in India

India is a diverse country with a multi-tiered economic and residential system. Crores of people do not own any residential property in the country, and thus have to rent homes owned by someone else. The relationship between the tenant and the landlord is complex and often handled privately. A majority of rental proceedings are done without any court agreement or enforceable contracts. Those who do get a rental agreement come under the purview of the Rent Control Act. 

Rent Control Act of India

The Central Rent Control Act of 1948 regulates the laws of renting property. The jurisdiction is set so that neither tenants nor landlords can be exploited by each other. Every Indian state has its own laws in this area, with minor differences in its interpretation and execution. 

The landlords and tenants of India are governed by the Rent Control Act. It is bifurcated into exclusive acts and is framed in accordance with both central and state governments. The rent law in India is enforced whenever real estate property is in question. Rent Control Act is implemented by state governments to consolidate laws relating to rental property.

The act encourages a fair transaction between the tenant and landlords. Through the act, a tenant can secure rights against undue harassment by the landlord, and the landlord can get guaranteed rights concerning their investment in the property. Although it has rights enshrined for both tenants and landlords, it is mostly regarded as a “tenant-friendly bill.”

Areas Not in Purview of the Rent Control Act

  1. Properties with a paid-up share capital exceeding 1 crore. 
  2. Properties sublet to PSUs, or corporations coming under the state/central act. 
  3. Properties lent out to international agencies and foreign companies. 

The Rental Agreement

The Rent Control Act in India is enforced by the rental agreement that’s signed between both parties at the beginning of their agreement. It is essential to have a rental agreement to warrant any intervention or relief from the court. Without the rental agreement, none of the parties can address their grievances. The two parties who sign the agreement must know the house rent rules in India and must agree to the terms and conditions of the agreement, which include the period of living, rent amount, and other important details. 

The agreement must be:

  • The rental agreement is a legal document that must be stamped and registered. 
  • The rental agreement must be dated and signed by both the tenant and the landlord. 
  • The rental agreement must keep a record of all the rectifications made throughout the years.

Rental Rights of Tenants & Landlords

Rights of a Tenant

1. Right to challenge unfair eviction:  As per the law, a landlord cannot evict a tenant without sufficient cause. The laws regarding reasoning differ for all states, but the baseline personalities remain the same. While some states, it is perennial to approach the court before making any claims, whereas some states accept that a tenant cannot be evicted if they’re willing to accept any change in the rent agreement.

2. Right to demand fair rent:  The landlord cannot charge an intoxicant rent from the tenant. The rent must be decided as per the valuation of the property. If the tenant feels that the amount being demanded is out of line, they can stake a claim in court.

3. Right to demand fulfilment of essential services: Tenants deserve the right to water, electricity, and sewage facilities in every house. The landlord cannot withdraw from these services, regardless of the circumstances. Landlords also cannot withhold these services if the tenant has failed to pay rent. 

Rights of a Landlord

1. Right to evict: Landlords hold the right to evict tenants after the completion of the lease or due to any personal and bona fide reason. The rights differ in each state, however, the reason remains the same. For example, wanting to occupy the home for themselves is a legal reason to demand eviction in most states but not Karnataka. Landlords must approach the court if an intervention is needed, and they must also serve the tenants sufficient notice before enforcing their eviction rights.

2. Right to charge rent: Landlords have the right to charge rent from tenants. Because there is no upper limit on rent in most places, the amount depends on the landlords and the market stipulation. The clause also covers cautionary rent and incremental change in the amount. The rent is always settled beforehand and goes into writing before enforcement.

3. Right to gain temporary repossession of property: The landlord has the right to repossess the property and bring forth necessary changes to the place, including its interior. Such changes, however, should not affect the living standards of the tenant or be in violation of the agreed-upon rental agreement.

Criticism of the Rent Control Act

Rent Control Act comes with major drawbacks, one of which is the disregard for raising rental prices with respect to inflation and market attitude. This is why many state governments have passed their own laws which override Central Act and are more in accordance with the current times. Indians who rent properties want protection against the cudgel of the landlord.

It is presumed that the party with multiple properties already has the edge over the party that has to rent. This is the rationale behind the act, which is liberal about the protection of the tenant. The act also has strong language against the unfair eviction of the tenant. As per the law, tenants have the upper hand in the rental agreement which gives them the benefit of the doubt. 

Summing Up,

Rent Control Act is the foremost law of the land regarding the rental agreements between tenants and landlords and is enforced in all cases bar a few exceptions. The act is the only governing statute for rental grievances in most cases. Furthermore, Indian states have passed several laws that contradict the central act, and such laws are enforced by the legislatures of the respective states.