Rights of Tenants and Landlords

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 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.

Different types of Agreement

In India, the owner can rent out their property in mainly two ways, either by lease agreement or by the license agreement. In the absence, of any agreement, it is considered as an implied lease agreement.

There are few major differences between lease and license agreement. Lease agreement is governed by Transfer of Property Act, 1882 and license agreement is governed by Easement Act, 1882. The Lease agreement can be for an indefinite period but license agreement is generally for 11 months with the periodical renewal clause. Rents under lease agreement are regulated by rent control laws, which differs from state to state.

Generally, it is advisable for owners to have a lease and license agreement with a periodical renewal clause and permanent termination clause, as it helps in preventing the transfer of ownership to tenants.

Rental Agreement

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.

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.

For a lease agreement, the terms of the lessee (tenant) and the lessor (landlord) when they enter into a lease agreement would include terms like the term of lease, deposit amount and monthly rentals. The lessor or the landlord should ensure the premises come back in the right shape in repossession.

There has been no damage to the tiling, plumbing, flooring or electrification and the premises are in the proper condition. No major changes have been incorporated in the premises. If the lessee has made some changes, which are not acceptable to the lessor, the latter may ask him to undo the changes. In the case of leasing of furnished premises, the condition of the furnishings is in proper condition. All the electricity and telephone charges have been taken care of till the specified date by the lessee or tenant at the time of repossession. On satisfactory fulfillment of all these aspects, the lessor should offer the refund of the security deposit (if given) to the lessee offering vacant and peaceful possession of the premises.

In a Tenancy Agreement there is a transfer of interest and it establishes the non-eviction of the tenant by the owner except on the grounds of eviction mentioned under the Rent Act.

Under the Leave and License Agreement transfer of interest takes place on permission and the same can be terminated as per the terms of the agreement. The possession can be demanded back from the licensee. The label to the agreement could be Leave & License or Tenancy Agreement, but it is the intention of the party that counts. Documentation of the commercial lease is also an important rental law procedure.

Rights of the Individual Party

The rights of the parties are stated in section 108 of Transfer of the property Act. Along with the rights, obligations of the parties are also stated in the Act. These rights and obligations can be amended based on the terms of the agreement.

The major obligation of the owner includes that he should disclose all the material defects in the property to the tenant, he should give the possession to the tenant when he asks for it and he is liable to enforce the terms of the contract if tenant fulfills its obligation.

Moreover, the owner is not allowed to visit the property without tenant’s permission. Tenants can also have visitors staying overnight unless it is specifically prohibited by the agreement. Tenants also have the right to contact the owner in case of any nuisance by neighbors during reasonable hours. Tenant has the right to mortgage the property to the extent of his interest, and in case, owner fails to fulfill his obligation he can deduct the loss with interest from the outstanding rent.

On the other hand, the tenant has a duty to disclose any material facts to the owner. In general, it is the duty of the tenant to take reasonable care of the property. Tenant is, also, obligated to make the rent payment in time. Along with it, he is also obligated to inform the owner about the required repairs. He, also, has to inform the owner about the person staying in the house and he must make sure that he does not create any nuisance in the property or for the neighbors.

Deposits

Prior to occupancy, tenants usually pay a security deposit of three months’ rent. This is usually refundable at the end of the contract, if no other liabilities have been left unsettled. Deposits are expected to be returned within a month after the end of the tenancy, or as stated in the contract. Until the deposit is returned, contracts commonly stipulate that interest must be charged on the deposit, computed at a daily rate.

8 Rights of Tenants

A tenancy is a possession or occupancy of lands, buildings or other property by title, through a lease or on payment of rent. Tenants and property managers/owners both have rights and responsibilities during a tenancy agreement. A tenant has certain rights against the landlord before and after he moves in the house. Here are few important rights which a tenant must know to protect himself from any illegality.

1. A Safe Home:

It is right of the tenant to have a safe home i.e. a home must always be installed with all the safety measures. Your home must be in good repair. You have right to ask your landlord to get the required repairs even after you move in the house. Therefore never hesitate from asking your landlords for the repair work.

2. Privacy:

Just because you are living in a rented house that belongs to the landlord, that doesn’t give your landlord complete right to enter the house casually. He can enter your home only for certain reasons. For example, your landlord can enter your home to make repairs or show the home to possible tenants or in an emergency. Also, you are entitled to quiet and exclusive enjoyment of your home. If noise from other tenants or neighbors is disturbing you, ask them to stop and also inform your landlord.

3. Documents:

A tenant has full right to get a written copy of tenancy agreement, written notice of your landlord’s legal name and address, and rent receipts. And he cannot deny the same.

4. Reimbursement:

You are entitled to reimbursement for any repairs that you carry out that are the landlord’s responsibility. You can ask for the same from your landlord before or after the repairs are done.

5. Terms of tenancy:

You are also entitled to know all the terms of tenancy beforehand. Also, you must be given a certain notice of termination of your tenancy so that you have a reasonable time to vacate the premises.

6. Legal Process:

Tenants must be careful before entering a rental home. They must make sure that they enter a lease deed under tenancy law beforehand which consists of all the terms and conditions so that in case of any dispute or default in future, the tenant can refer to these terms and can claim compensation. Aspects of sub-letting, misuse, damages etc may be covered and mentioned in the lease deed itself. It is always better to consult a good lawyer and get his advice on all aspects related to tenancy laws in India and then get the lease deed or the tenancy agreement drafted accordingly.The rent deed for the tenancy up to a period of 11 months can remain unregistered. In case of tenancy is being created for a period more than 11 months then the rent deed should be registered to give it a legal value under the tenancy laws in India.

7. Rent and Period of Tenancy:

The rent deed must contain the period of tenancy i.e. the period when the tenancy commences and the period when it is going to be over. The date of payment of the rent may be also mentioned. It should also contain the proposed increase in the rent which can be automatic after the period of time or can be negotiated mutually under the tenancy laws in India.

Recent Ruling: To avoid litigations arising out of landlord-tenant disputes, the Supreme Court last year passed a judgment that a landlord cannot evict a tenant for at least five years, if the tenant has paid the rent regularly according to the agreement between the two parties. However, the owner can evict a tenant if he wants to use the premise himself.

8. Rights of legal heirs of tenants:

Legal heirs of the tenant are also tenants and get all the protection available to the tenant under the Rent Control Act of various states. However, it is the choice of the legal heir if he wants to renew the contract with the landlord and continue to stay.

Rights of Landlords

While we talk a lot about the rights of a tenant and how to safeguard them, there is other side of the transaction, too. A landlord. Under the rental laws in India, there are rights that safeguard the interests of a landlord, too.

The Rent Control Act is one important act passed by the Government of India in 1948, post which several states like Delhi, Maharashtra and Karnataka have undertaken modifications to the same. The act, however, seen as pro-tenant, also, talks about the protection of rights of landlords. Recently, various amendments have taken place pertaining to new laws favouring landlords.

Whether a first-time landlord or a seasoned renter, here’s what you should know about the basic rights of landlords:

1.Right to evict a tenant

With the Rent Control Act applicable only to a tenancy of over 12 months, things seemed tougher for landlords to evict tenants living in the property for years. The Draft Model Tenancy Act 2015, which has been in the news recently, aims to make things easier for landlords as well as tenants by addressing untimely eviction, repossession issues as well as mutually fixing and revising the rent. Laws now allow landlords the right to evict a tenant on the grounds of breach of rental agreement; subletting rented premises or a part of it without landlord’s permission; default in payment of rent for specified period; misuse of the property; or conducting illegal activities in the rented premises. The landlord also has a right to evict a tenant if he or she requires the building for his or her own occupation.

To prevent tenants from overstaying, landlords can also add a clause of hike in rent in the agreement, if the tenant does not leave when the contract ends.

2. Right to temporary recovery of possession

A landlord is entitled to obtain possession of the property, in case there is a requirement for him to carry out repairs, alterations or additions to the building, which cannot be carried out without the building being vacated, after which the building will again be offered to the tenant. Or, if the rented accommodation has become unsafe for habitation and cannot be refurbished without being vacated, the landlord is entitled to get possession of the property.

3. Right to increase the rent

Regulations allow landlords to have an upper hand as far as the collection of rent is concerned. Owners of residential or commercial properties not only have a right to charge rent at market rates from their tenants for taking the premises but also to raise the rent periodically. The Draft Model Tenancy Act is instrumental in creating a balance by bringing the urban rented accommodations under the purview of the formal housing sector. The Act clearly specifies the period, inheritance, rents payable as well as the obligations of landlord and tenants. In India, the applicable rate of rent increase is around 10 percent, every two years, for residential properties. But, mostly, there are laws governing this too. For instance, the landlords in Delhi can increase rent only as per Section 6 & 8A of Delhi Rent Control Act.

4. To be advised of necessary repairs

It is the duty and the right of the landlord to respond to the requests for repairs in a reasonable amount of time. Minor repairs of the property could be undertaken by the tenant. However, for all major repairs requiring reimbursement, prior permission needs to be taken from the landlord in writing. So, a landlord has the right to be informed about necessary repairs being made to his or her property. As per law, the landlord is under obligation to keep the property in good and tenantable form. But the rent control act provides the provision for both parties to share the financial burden of the repairs.

Conclusion

The Rent Control Act provides for safeguards for both the tenants and landlords and also states their obligations thereby providing for provisions in cases where the property owner exploits the tenant and also where the landlord is the victim which gives power to both.

Amendments in the Rent Control Acts is a progressive step towards controlling the disputes among tenants and landlords.