Research paper

On
STRIKING A BALANCE BETWEEN LANDLORD AND TENANT
Submitted for:
Subject code: 505

IX Semester
B.A.LL.B. (H)

BY:
MOHIT DEWAN
05317703811
SUPERVISOR:
Ms. PALLAVI

VIVEKANANDA INSTITUTE OF PROFESSIONAL STUDIES

GGSIPU UNIVERSITY
November, 2015

DECLARATION

I, hereby declare that the Research Paper entitled STRIKING A BALANCE BETWEEN
LANDLORD AND TENANT is an original work undertaken by me and it has not been
submitted in any university for any degree or diploma.

Place:
Date:

Name of the student and signature

CERTIFICATE

This is to certify that the Research Paper entitled, STRIKING A BALANCE BETWEEN
LANDLORD AND TENANT has been prepared by MR. Mohit Dewan, a student of
Vivekananda Law School, Vivekananda Institute of Professional Studies under my
supervision and guidance and I recommend it for submission for the evaluation.

Place:
Date:

Name and signature of the Supervisor

ACKNOWLEDGEMENT

I express my deep sense of gratitude and sincere thanks to Vivekananda Institute of

Professional Studies for encouraging me to take up this research work.
I owe a deep sense of gratitude to my project supervisor Ms. PALLAVI for the efforts taken
by her in helping me complete my research work.
I am thankful to her for her ideas and constructive criticism, which immensely contributed to
the evolution of my ideas on this topic.
In the end I would like to thank my family and friends who helped me complete this research.

OBJECTIVE:
The objective of this research is to:
1. To get an insight into the legal position of landlord before the eyes of law.
2. To get an insight into the legal position of tenant before the eyes of law.
3. To strike a balance in the relationship between the landlord and the tenant.

RESEARCH METHODOLOGY:
books speak more than men do
- unknown
The research paper is based upon Doctrinal Approach, involving extensive and in-depth
study of the legal literature based on the topic. The research includes the interpretation of
already existing information, laws, journals, researches, judicial pronouncements,
textbooks, library study. These sources include information in a systematic and planned
manner.The aim of this research is to know something more about something or to discover
answers to meaningful questions through the application of scientific procedures.

INTRODUCTION
Landlord Tenant relationship is very close relation as it is like two sides of a same coin. If
landlord is a tail then tenant is the head and vice-versa. Landlord is a person who owns
property and allows another person to use it for a fee. The person using the property is called
a tenant. Relationship between Landlord & Tenant takes place when the owner actually has
title to the property & he consents to occupancy of the premises. Tenant acknowledges that
the owner has title to the property and a future interest in the property. Tenant receives a
limited right to use the premises. The owner transfers possession and control of the premises
to the tenant and a contract to rent exists between the parties. Landlord and tenant
relationship also exists even in the absence of a written and signed rental agreement between
owner of the property and the person living on property.
In India, there are two types of Tenancy Agreements one is Lease agreements which are
covered by Rent Control Laws and Lease and License Agreement which are not. A Lease or
Rental Agreement is covered by restrictive Rent Control Laws. The amount of rent that can
be charged is based on a formula devised by the local executive, legislative or judicial
government, as the case maybe. In India, Landlord & tenancy agreements are governed by
various laws enacted by the Central Government of India and respective State governments.
One of such law is RENTAL LAWS.
These laws govern the rental of commercial and residential property and are necessary to
enforce individual civil rights of both landlord and tenant and prevention of any kind of
deceit.
In India, there are two types of Tenancy Agreements one is Lease agreements which are
covered by Rent Control Laws and Lease and License Agreement which are not. A Lease or
Rental Agreement is covered by restrictive Rent Control Laws. The amount of rent that can
be charged is based on a formula devised by the local executive, legislative or judicial
government, as the case maybe. In India, Landlord & tenancy agreements are governed by

various laws enacted by the Central Government of India and respective State governments.
One of such law is RENTAL LAWS.

These laws govern the rental of commercial and residential property and are necessary to
enforce individual civil rights of both landlord and tenant and prevention of any kind of
deceit.

BRIEF HISTORY
Prior to the Rent Control Legislation in this country, all the relations between landlords and
tenants were governed by the Transfer of Property Act-1888. In the said Act, the
nomenclatures were lessor and lessee. Under Section-108(m) of the T P Act, it was the
responsibility of the tenant to keep the premises in as good condition, as it was at the time of
letting.

For all those years, the relationship between landlords and tenants worked prior to coming
into operation the Rent Control Legislation in this country, and the buildings were maintained
by either the tenant, because of the obligation under the aforesaid Act, or as per the terms of
the agreement by the landlords. Even today, in some parts of India, there is no Rent Control
Legislation. As a general law, a covenant for "keeping the premises in good and tenantable
repair included rebuilding the premises, if the building is destroyed by irresistible force such
as flood, fire or earthquake, etc, or which became worn out and dilapidated due to age."

After the Delhi Rent Act 1958 came into force, Section-44 was introduced wherein the
obligation to repair the building is imposed upon the landlord. However, since the rent was
frozen at the rate of 1940s, it became uneconomical for the landlord to repair the building and
therefore, the landlord started neglecting the maintenance of the building. Another reason
was, the cost of repairs increased due to inflation and the value of the rupee depreciated,
while the rent remains the same.

TENANT- RIGHTS AND LIABILITIES

Who Is A Tenant?
"Tenant" means any person by whom or on whose account or behalf the rent of any premises
is, or, but for a special contract, would be, payable, and includes(i) a sub-tenant;
(ii) any person continuing in possession after the termination of his tenancy; and
(iii) in the event of the death of the person continuing in possession after the
termination of his tenancy, subject to the order of succession and to this clause, such
of the aforesaid persons(a) spouse,
(b) son or daughter, or, where there are both son and daughter, both of them,
(c) parents,
(d) daughter-in-law, being the widow of his pre-deceased son, as had been ordinarily living
in the premises with such person as a member or members of his family up to the date of his
death, but does not include,any person against whom an order or decree for eviction has been made, except where such
decree or order for eviction is liable to be re-opened under the proviso of section 3 of the
Delhi Rent Control (Amendment) Act, 1976 (18 of 1976);
(B) any person to whom a license, as defined by section 52 of the Indian Easements Act,
1882 (5 of 1882), has been granted.
RIGHTS OF A TENANT
Tenant has the right to enjoy the rental property privately, undisturbed by others. The
landlord has to respect tenants peace and privacy. If he/she doesnt, the Tenancy Tribunal can
fine the landlord.

What are the obligations and responsibilities as a tenant?

Unless the landlord agrees in writing to pay for them, tenants are obliged to pay the power,
gas, telephone charges.
Tenants must also pay water usage charges if:

the water supplier charges separately for the water , and

there is a meter to measure how much water was used

Note that the landlord is responsible for paying any fixed water charges.
During the tenancy, tenant must not1:

intentionally or carelessly damage the premises

use the premises for anything illegal

disturb the neighbours

have more people living in the premises than are specified in the agreement

change the locks, attach fixtures or make any renovations, alterations or additions to
the premises unless outlined in the agreement or allowed with written permission from
the landlord

As a tenant he/she is responsible for:

paying the rent on time

making sure the house or flat is used mainly for living purposes

keeping the house or flat reasonably clean and tidy

being a good neighbour (i.e. not disturbing your neighbours or other tenants)

letting the landlord know as soon as damage is discovered or repairs are needed

leaving when the tenancy comes to an end

1
http://www.cab.org.nz/vat/hle/rt/pages/rightsobligationsoftenantslandlords.as
px

removing all your personal items from the house or flat when you leave

leaving the house or flat reasonably tidy, and remove all rubbish at the end of the
tenancy

returning the keys to the landlord at the end of the tenancy

leaving any personal items or pieces of furniture provided by the landlord

LANDLORD- RIGHTS AND LIABILITIES

Who Is A Landlord?
Following categories of persons fall within the meaning of landlord : (1) any person for the time
being entitled to receive rent in respect of any building or rented land;
(2) a trustee, guardian, receiver, executor or administrator for any other person;
(3) a tenant who sublets any building or rented land in the manner authorised under the Act and (4)
every person from time to time deriving title under a landlord. Among these four categories of
persons, brought within the meaning of 'landlord', Mr. Sharma sought to derive support from the
last category. Even so that category refers to a person who derives his title under a landlordand not
under an owner of a premises. For purposes of the said category the transferor of the title referred lo
therein must fall under any of the categories (1) to (3). To be a landlord within themeaning of
clause (c) of section 2 a person need not necessarily be the owner; in a vast majority of cases an owner
will be a landlord but in many cases a person other than an owner may as well be a landlord. It may
be that in a given case the landlord is also an owner but a landlord under the Act need not be the
owner. It may be noted that for purposes of the act the legislature has made a distinction between an
owner of a premises and a landlord. 2

Rights Of A Landlord?
Landlord has the right to:

enter the premises if s/he has the tenants permission (usually landlord has to give 48
hours notice), if there is an emergency, or if the Tenancy Tribunal has made an order
that the landlord can enter the premises
2 K.D. Dewan v. Harbhajan S. Parihar (Appeal (civil) 4834 of 1999)

receive rent when it is due

set an amount for bond money

inspect the premises when the tenant leaves

hold money back from the bond / security if there has been damage during the
tenancy or if there is any rent owing from the tenants

What are the obligations and responsibilities of a landlord?3

During the tenancy, landlord must:

provide a written and signed tenancy agreement

provide the premises in a reasonably clean state

keep the premises in a reasonable state of repair

comply with building, health and safety requirements

provide receipts to your tenants for their rent payments if these payments arent
recorded in some other way (e.g. if the rent is paid to him/her in cash)

provide written notice of any rent increase

take reasonable steps to make sure none of your tenants disturb each other (if you
have tenants in neighbouring flats)

compensate the tenant for serious and urgent repairs that the tenant has had done, if
the damage was not the tenants fault and the tenant made a reasonable attempt to
contact you about the repairs

give the tenant at least 24 hours' notice if you need to do any repairs or maintenance,
and do the work between 8am and 7pm

ask the tenants permission and visit at a reasonable hour if the landlord wants to
show a prospective buyer, tenant or registered valuer through the premises

not use force, or threat of force, to enter or attempt to enter the premises while the
tenant or anyone else is on the premises its an offence to do so

not interfere with the supply of gas, power, water, telephone services, or other services
to the premises, unless it is necessary for maintenance or repair, or to prevent danger
3 Supra

The landlord must provide and maintain locks necessary to make the premises secure, and
cannot change the locks without the tenants permission.
Landlord is responsible for:

providing locks that keep the house or flat secure

giving notice to the tenants if the house or flat is going to be sold

giving at least 48 hours notice if you want to inspect the house or flat

giving at least 24 hours notice of any repair work to be carried out

If landlord wants to inspect the premises s/he

has to give the tenant at least 48 hours and up to 14 days warning

must inspect between 8am and 7pm

cant inspect more than once every four weeks

PROTECTION AGAINST EVICTION AND FIXATION OF FAIR RENT

(FOR a Balanced Aproach)
All transactions in Indian real estate sector are governed by various laws enacted by the
Central Government of India and respective State governments. One such law is the
RENTAL LAWS. These laws govern the rental of commercial and residential property and
are necessary to enforce individual civil rights of both landlord and tenant and prevention of
any kind of deceit.

The real estate scene in India is flawed by land market distortions. The most glaring ones
include inflexible zoning, rent and tenancy laws. Zoning laws, rent controls and protected
tenancies have been detrimental to the healthy rental trends in India. They have put a freeze
to land in city centers that could be otherwise made available for new retail outlets and flats.
These laws also gloss over operational inefficiencies and scuttle competition 4. Tenants
residing could not be evicted for along time and would not surrender their cheap tenancies on
their own volition. The renovation of buildings could hardly happen. One such act favoring
the rental property market in India is the Rent Control Act.

The basic objective of the rent control legislation is to protect the tenant against exorbitant
rents, arbitrary increases in the rent and ensure him security of tenure. The legislation has
been necessitated by conditions of scarcity prevailing in rental housing markets of urban
areas. As housing is a State subject, different State Governments have framed their own rent
control laws. By 1972, almost all the States in the country had enacted Rent control Acts
(RCA).
Rent control was conceived as a short term measure to overcome the problem of temporary
shortages during World wars. The Acts were therefore enacted for short and limited durations.
This practice has continued and the rent control Acts in most States are temporary Acts and
are extended every few years. The State Governments have periodically amended the Acts
either in response to changing market conditions or to plug some loopholes and improve the
functioning of the Acts.
4 V.P. Sarthi, Law of Transfer of Property, (Lucknow: Eastern Book Co.) 2005

The rent control Acts are generally applicable to all urban areas in the States and to most of
the residential and non-residential premises in these urban areas. The exempted premises
include those belonging to the Union Government, State Government and local authorities.
Some states also exclude from the preview of the Act properties falling below or above
certain rental values, newly constructed properties, as also properties belonging to charitable
Trusts etc. In each city these exemptions account for a significant proportion of the total
rental housing stock
Major Provisions of the Rent Control Act
The

Acts

typically

contain

in

regard

to

the

following

provisions:

a) control on letting and leasing of vacant buildings to assist tenants in their search for
desirable rented accommodation,
b) fixation of fair or standard rent,
c) protection to tenants against indiscriminate eviction by unscrupulous landlords,
d) obligations and duties of landlords vis-avis maintenance and upkeep of their rented
properties,
e) rights of landlords against tenants who default in paying rent or misuse the premises, and
f) rights of landlords for the recovery of premises in specific cases.

Impact of Rent Control Acts

There is a near unanimous opinion that the social objectives of rent control acts have not been
realized. On the other hand there have been various adverse effects. The most significant
impact is on the supply of rental housing which is influenced by the Act in three different
ways:a) The negative effect on investment in new rental housing and supply from the existing stock
of housing. This is not only due to low rents but also due to the fear of losing the house to the
tenant altogether.
b) Withdrawal of supply from existing rental housing stock. Even though evicting the tenant
is very difficult, as and when the landlord recovers the premises the disincentive to re-let the
premises is quite high. The large number of vacancies is an evidence of the same.

c) Accelerated depreciation due to inadequate maintenance. Under the controlled regime, the
rents continue to remain at a low level whereas the cost of maintenance continues to increase.
The situation is more severe in case of old tenancies where the rents have been frozen at
historical low levels. It is in case of these old properties that the need for maintenance is
higher. The older housing stock in our urban areas thus faces premature decay and
degradation. These are also the areas with highest productivity of land. The economic cost of
premature death of these properties as also of their low productive use is quite high.

The rent controls have led to stagnation of revenue from property taxes since the base of
property tax is Standard Rent which has been frozen under most Acts.5
The frozen rents have led to emergence of practices like key money. Thus, apart from
creating a black market in rental housing, the Act has reduced the accessibility of low income
groups to rental housing, as they cannot afford to pay large deposits to rented premises.
The widening divergence between the interests of landlords and tenants has not only led to
increased litigation under rent control Acts (the rent control cases make for a majority of
cases in courts) but also to increased crimes. A large number of criminal cases have their
origin in disputes over rented properties.

Delhi Condition

Recognizing the negative impact and tension created by the rent control Act, various
commissions have been set up by the Central and State Governments to suggest reforms in
the Act. At the center, Economic Administration Reforms Commission was set up in 1980
and National Commission on Urbanisation in 1985. The amendments in the Delhi Rent
Control Act 1958 in the year 1988 have been influenced by these suggestions. Many other
States (among them Maharashtra, Tamil Nadu and Madhya Pradesh) have also carried out
amendments in their Acts.

5 Requisition and Acquisition of Immovable Property Act, 1952 (Delhi: Universal Law

Publishing Co. Pvt. Ltd.) 2007

The reforms in the Rent Control Act have been motivated by the following objectives:
a) promoting adequate supply of rental housing for different income groups and ensuring
proper maintenance of old housing stock, especially in inner city areas;
b) establishing a better balance between the interests of bonafide tenants in terms of security
of tenure and those of landlords in terms of adequate return and easy resumption of
possession in genuine cases;
c) making rent control acts less inhibitive;
d) reducing litigation under the Rent control Act
In pursuance of these objectives, the reforms have been directed towards;
i.

Liberalizing the existing Rent Control Acts by slowly releasing a larger

segment of the rent housing market from the purview of the market and
reducing the stringency of controls in the controlled segment of the

ii.
iii.

market;
Amending provisions to facilitate expeditious disposal of cases;
Plugging loopholes in existing rent control Acts for enabling periodic rent
revision, enforcing obligations of landlords and tenants and balancing
security of tenure with resumption of possession by landlords in genuine
cases of need or hardship;

The Delhi Rent control Bill 1988 which was to provide a model for amending the
various State Acts has been a precursor of similar amendments in various state
governments.

The

salient

features

of

this

Bill

are

given

below:

1. Exemptions from the purview of the RCA extended to newly constructed

properties for a period of ten years;
2. Exemption to premises carrying rent beyond Rs. 3,500/- per month;
3. The calculation of Standard Rent to be based on actual rather than reasonable
cost of construction and the market price of land in the base year
4. The permissible Standard Rent raised to ten percent from 7 percent earlier;
5. The Standard Rent or agreed rent to be increased by ten percent every three
years;
6. The tenant to be protected against eviction for ten years from the date of
building his own house (Clause 14(1) (hh);

7. Right to recover for their own use immediate possession of residential

premises made available on rent by certain sections of population like widows,
defense personnel and retiring Government personnel;
8. Increased penalties for relenting (after reentry for bonafide reasons) and other
offenses; and
9. In calculating cost of the house or additions thereto, the controller permitted to
take

help

of

the

valuers

approved

by the

Central

Government.

The Act came into effect in December 1988. Large number of writ petitions
were filed in the Supreme Court challenging the constitutionality of the
amendments. The Supreme court, in a series of judgments, has upheld the
validity of most of these amendments. The Government of India has requested
all the state governments to enact amendments to rent control laws on similar
lines. This was broadly endorsed, as a part of the Draft National Housing
Policy, in the conference of Housing Ministers in October 1990. A number of
States have initiated amendments in this regard.6

In the light of the principles accepted in the context of Delhi and other reforms dictated by
practical experience in a number of states and the requirements of conservation and better
maintenance of existing stock of buildings, and in the light of suggestions received from state
governments and experts, it is recommended that the following broad framework for revision
of RCA may be considered:
A.Exemption
1. Taking into account the fact the problem of rent control is more severe in larger cities and
inner cities and the need to enable the judicial bodies to dispense justice expeditiously with
lesser load on the courts, the rent controls should be applicable only to large urban areas with
population of 3 lakhs and above as per 1991 census. This will mean coverage of a total of 92
cities/towns having population above 3 lakhs. In urban areas with population of less than 3
lakhs where rent control be applicable at present, the Act may cease to be operative from the
date of notification of the amended RCA in the State. The population limit is indicative and

6 Available at reboker.com/rent/Policy paper.rtf visited on October 2012

the State Governments may cover cities of 1 to 3 lakhs also or even less than 1 lakh as per
local needs.
2. Exempt new construction for a period of fifteen years. New construction may be defined
not only as entirely new construction on a vacant plot of land, but also substantial renovation
on existing site so long as 75 per cent of the building is built anew. Technical criteria for
determining the extent of renovation will be prescribed. Rent agreed between the landlords
and the tenants of above Stated premises and being paid in the fifteenth (last) year of
exemption may be deemed to be the standard rent subject to future indexation. Tenants
refusal to pay this rent could be a ground for his eviction.
3. Exempt premises whether newly constructed or otherwise for a period of 15 years, where
the premises have not been under tenancy for seven years or more after the last tenancy.
4. Exempt all tenancies where the term of tenancy extends beyond 20 years, as the tenure
terms are more appropriately governed by the conditions of lease than by rent control.
5. Exempt residential and non-residential properties above a specified rent, cut off rent to be
defined for single tenancy, as per the proposed new formula for standard rent and as net of
property taxation, maintenance charges and charges for amenities. The exemption to apply to
existing tenancies also and both existing and new constructions. The exemption limits may be
in relation to size of the cities/towns based on population. This will be revised every 3 years
according to the consumer price index. The suggested exemption limits could be as follows:Urban Areas Exemption limit
>10 lakh Rs. 3500/- per month
5-10 lakh Rs. 2500/- - do
3-5 lakh Rs. 1500/- - do

6. Exemption to premises with legal title and valid building permission owned by Wakf and
such other religious and charitable trusts including trust operating educational institutions
may be considered on a uniform basis by State Governments according to local
circumstances.

7. The exemption to low rent properties can be withdrawn as it merely exposes poor tenants
to exploitation. The exemption to low rent properties was granted on the ground that at very
low rents the need to protect the tenant was minimal. Also the absence of rent co troll may
encourage more rental housing in this segment. This however has not happened. Moreover, as
has been the experience in many States, RCA is more effective in granting security of tenancy
and assuring availability of minimum amenities to the tenant rather than in controlling rents.
The exemption deprives the low-income groups from this protection.
In many States (Tamil Nadu, Karnataka Andhra Pradesh) where properties below a particular
rent level have been exempted, the historically prescribed rent levels have been too low to be
relevant after 20 years. In cases where the levels have been revised upwards, many high
valued properties where the rents have been frozen due to operation of rent control laws have
been exempted thereby distorting the intent of the legislature. It is, however, proposed that
the low rent properties may continue to be exempted from the provisions relating to
accommodation control, wherever these are retained by the State Governments in their states.
8. Exemption of premises hired by diplomats, foreign missions and international agencies.
Since most of them pay high rents, these will be anyway exempted under the proposed
provision of exempting high-rent properties.
9.

Accommodation owned by Governments, Cantonment Boards and local authorities as

defined in Nagar Palika Bill should also be exempt. The accommodation rented by the
Governments and local bodies however will be under the purview of Rent control Act subject
to the exemptions specified above.
B. Standard Rent
Substitution of multiple formulae for fixing standard Rent (SR) by a simple formula, which
will provide fair rate of return on the investment in the house.
a) Standard Rent (SR) to be fixed on the basis of 10% return on the cost of construction
an market price of land at the commencement of construction. The rate of return can
be varied by legislation. The Standard Rent so derived could be increased by a certain
percentage from the year of construction to the present year to arrive at Standard Rent
for given year.
b) To this Standard Rent are to be added charges on account of maintenance, taxes
payable and amenities. The maintenance charge may be ten per cent of the Standard

Rent, that for taxes as per actual tax payable pro-rata and the charge for amenities as
agreed between the landlord and the tenant subject to a maximum in relation to the
rent paid. These charges are over and above the standard Rent and do not constitute a
part of it.
c) The new Standard Rent to become applicable from the day the Act becomes effective.
The permitted increases in Standard Rent would also be effective from the day the
amendment permitting the increase in rent comes into effect.
The Standard Rent may be revised every three years on the basis of criteria notified
by the State Governments. Meanwhile, the Standard Rent to increase by a given
percentage every year to be prescribed by each State according to rate of inflation,
subject to adjustment at the end of three years according to CPI. The increase in,
Standard Rent will be automatic. Reference to the rent controller will be made only in
case of disputes on the base rent.
The rate of increase could vary from city to city and can be higher for larger urban
areas. Thus in cities like Delhi, Bombay etc. Standard Rent could increase by eight
per cent every year, where as for smaller urban areas this figure could be five per cent
or as the State Government may decide. The percentage of increase n Standard Rent
may be higher in case of non-residential properties.
For most of the States in India, price increases over the past one to two decades have
been in the range of 8-10 per cent. This should determine the outer bound for
prescribed increases in rent, since in smaller cities as well as in some parts of large
cities an increase of ten per cent may result in Standard Rent being higher than the
market rent. Further the rent control acts have also been used as anti-inflationary
measures and rent increases equivalent to price increases may fuel the inflationary
pressures. Under the current macro-economic scenario when the CPL has crossed 14
per cent mark, linking rents with CPI will lead to sharp increases in rents.
Extrapolating the current rents at 8 percent per annum, a rent of Rs. 1500/- for a two
bedroom flat in a middle class colony in Delhi in 1991 will increase to Rs. 2204/- by
d).
e).

the year 1995 and will approximate Rs. 3500/- by 2001.

The increases in Standard Rent for premises in non-residential uses may be at a higher rate.
The new Standard Rent will be applicable to all old new tenancies. The rent of the old
tenancies with less than the specified rent is to be brought at par with the prescribed Standard
Rent gradually over a period of five years in order not to impose a sudden financial burden on
tenants. The State Government may decide to have a longer adjustment period and/or a lower
rate of growth of rents of older tenancies to further lighten the burden on tenants.

The level of neutralization of rent may relate to the age of premises and lower rates of
increases be used/adopted for earlier period. Further, the level of neutralization could
range from 25 per cent for residential premises with less than 25 square meters area to
100 percent for plinth area over 80 sq.mtrs. and for non-residential premises/
f).

Standard Rent is to be increased if landlord invests subsequently in the premises and

the investment has been made in agreement with the tenant/s and it leads to significant
improvement in the flow of service or amenities to the tenant/s. The increase in
Standard Rent will be only in relation to expenditure incurred on construction by the
landlord. The land price taken for calculation of the rent will continue to be the price
prevailing at the time of initial construction as indexed up to the year of
reconstruction.

g).

Reduction in flow of service due to reduction in accommodation space or poor

maintenance or deterioration in services will result in lowering of standard rent and
the tenant can apply to Rent Collector for re-fixation of rent.
The important principle is that while the tenant will enjoy security of tenure in
controlled premises, he should agree to pay a rent that provides adequate return on
investment and provides for proper maintenance and taxes, so that he does not enjoy
an unfair advantage over the landlord. If at all the tenant is to be subsidized, it should
be done by the State and not the landlord.

Standard Rent and Revenue Base of the Local Authority

The revision of standard Rent will strengthen the property tax base and augment the
financial resource base of the local authorities for whom property tax is a major
source of revenue.

C. Eviction
Almost all state Acts specify certain grounds for evicting the tenant which include
non-payment of rent, misuse or non-use of premises requirement for major repair or
reconstruction, bonafide need of the owner and acquisition of a house by the tenant. It

is suggested that the following grounds may be added to the above:a). refusal to pay revised standard rent;
b). sub-letting of premises (without the permission of the landlord);
c). Failure of tenant to deliver possession after giving notice to quit;
d). Denial by the tenant of title of landlord;
e). Deliberate misuse or damage of premises, and other reasons cited in a number of
State laws. These have been included as the statutory grounds for eviction in various
states.
In the current Acts, summary procedure is available for evicting the tenant in case of
bonafide requirement of the landlord for certain category of owners. In Delhi,
Summary procedure is available for eviction on bonafide grounds to all owners. With
this a special category of persons like Government servants, widows, armed forces,
etc. has been created who is to be provided immediate possession incase of bonafide
requirement. It is suggested that to this special category we add the aged (65 years and
above) and the handicapped. The State Government may include some other groups
(like scientists etc.) for special treatment depending upon the special requirement of
these in each state.
In eviction proceedings, compromise between landlord and tenant should be permitted
at any stage.

The landlords should be penalized heavily for not occupying or relating the premises
within three years of getting possession on grounds of bonafide need. This offense can
be taken cognizance suo moto by the Rent controller who can also charge the fine on
a continuing basis. In case the landlord demolishes and reconstructs the house after
acquiring possession, the period of three years is to be counted from the day of his
occupying the house. The penalties may be provided for in State laws.
Acquisition or building of a house by the tenant his spouse or dependent children will
be a ground for eviction of the tenant. The tenant is to be given a period of one year to
move to the newly acquired house from the time it is ready for occupation so long as

he does not let out the house whereafter the landlord can move the rent controller for
eviction of the tenant by summary procedure.
Resumption of possession for own use should be provided for controlled nonresidential premises. The grounds for eviction should be specified. Under the RCA,
special rules should be framed for non-residential premises. Most of the premises
should be brought within the purview of contractual tenancy as far as possible. The
law can provide for penalty for both landlords and tenants for the violation of
obligations listed in the Model Law.
Streamlining Judicial Procedure under Law
The present civil courts are over burdened with cases under the Rent Control Act over
and above other cases, and it takes many years for disputes to be settled or for
landlords to get possession even in genuine cases. In Delhi, 10,000 cases are filed
each year in contrast to the maximum disposal of 4000 cases, and there are three tiers
apart from the SLP to the Supreme Court. Court has recognized this in a number of
cases and has advocated a system of adjudication by Tribunal and the exclusion of
civil courts from hearing rent cases. A proposal for amendment to Article 323 B of the
constitution to provide for the establishment of state level Rent Tribunals and
exclusion of jurisdiction of High Court and other Courts has been approved by the
Cabinet. Adjudication of rent control would be vested in rent controllers (excluding
civil courts), with only one court of appeal to Tribunals at the State level. The State
level Tribunals to be set up will not be governed by Civil procedure code and may be
given powers to decide all issues (like that of ownership, title etc.) pertaining to
resolving of tenancy disputes. UnderArticle 136 of the constitution, SLP will be only
to the supreme Court against the orders of State level tribunals. Tribunals can also
take up cases suo moto for revision. The constitutional amendment will ensure
excluding the writ jurisdictions of High Court. Details of composition, jurisdiction
and procedure of the Rent Tribunals and Rent Controllers will be finalized in
consultation with Min. of Law.

The powers of rent controllers would include the power to accept affidavits as proofs.
The controller should also have the power to record a lawful agreement or
Compromise between the litigants and make an order accordingly. There should be

heavy penalty for adjournment on frivolous grounds. It is open to State Governments

to extend the jurisdiction of the proposed two tier system to properties or towns not
falling under Rent Control Law if they can make the budget provision or strengthen
the set up suitably.
The procedure of litigation should be simplified. Summary procedure should be
followed and decision should be given largely on the basis of written statements and
plaints as suggested by the Supreme Court itself in one case. Oral evidence can be
limited to minimum. Representation by Counsel allowed only when absolutely
necessary. Code of civil procedure in all its details should not be applicable to the
functioning of the Tribunals.
There should be a time limitation of disposal of cases specially under the Summary
procedure. This would be facilitated if day to day hearing is allowed for these cases.
In case the Rent Controller fails to abide by the time limitation, the Tribunal will have
suo moto powers to call for the papers of the case and decide the case itself.
Prescribed standardized proformae for instituting appeal under various provisions to
be prepared for use of landlords and tenants.
D. Maintenance
Providing for better maintenance and up gradation of houses by:
a). including maintenance cost explicitly as charges payable by the tenant to the
landlord, thus making it viable for the landlord to carry out proper repairs etc.
b). The landlord to be responsible for all structural repairs whereas the tenant can
carry out day-to-day repairs against adjustment towards rent. These should be
specified.
c). The landlord to be given the right to inspect the rented premises;
d). The tenant to restore premises o the landlord in as good a condition as at the time
of entry.
e). Procedures for temporary vacation of premises for renovating old buildings to be
simplified. In this respect, the RCA should be excluded from the operation of the
other related Acts like slum Clearance and Improvement Act etc.

Following terms of re-entry of the tenant can be prescribed:i.

ii.

The tenant is not to be provided any compensation for temporary vacation.

The tenant is to be given first choice in the allotment of accommodation in

iii.

the renovated premises.

The landlord can apply for revision of rent taking into account expenditure

iv.

incurred on special repairs to the building.

The tenant is to be required to pay the revised rent on the basis of the
prescribed percent of cost of reconstruction (renovation). The cost of land
taken for calculation of standard rent will be based on indexation of the

v.
vi.

original land price rather than market value of the year of reconstruction.
Tenants refusal to pay the revised rent will be a ground for eviction.
The landlord can use the remaining premises for any purpose permissible
under the Building Bye-Laws etc. after providing for residential space
equivalent to that available in the older building to the erstwhile tenants.7

E. Obligations of Landlords and Tenants

Whereas most of the State Acts prescribe obligations of the landlords, that of the
tenants are omitted. In order to streamline the system, it is imperative that the Act
not only states responsibilities of landlords but also of tenants.
1. Landlord to compulsorily register tenancy with the authority designated by the
State Government.
2. Landlord liable to give rent receipt to the tenant.
3. Willful cutting off or withholding of essential services by the landlord or
tenant to be penalized heavily.
4. Obligation of tenants have been covered under Maintenance paragraph.8
Limited Period Tenancy
In order to induce landlords to supply rental housing a few state Governments have
introduced new provisions in the Act to create special category of contractual or semi
contractual tenancy within the framework of rent control acts. Recognising that the
major disincentive to rent out the premises has been the difficulty associated with
7Madabhushi Sridhar, Unfair rent Uncontrollable Control, (Hyderabad Asia
Law House) 2009 p.220
8 Available at www.lawmart.com visited on 20/10/2015

getting repossession by the landlord at the end of the contracted period. It is proposed
that such provisions be introduced in all state Acts.
i.

The landlord be permitted to let out his premises for a limited period not

ii.

exceeding five years, if he does not require the same for that period;
Such permission will be granted by t the rent controller after verifying the
bonafides of the landlords contention. There will be a limitation on the number
of times such permission can be granted;
During the period of tenancy all provisions of rent control act be applicable.

iii.

However at the termination of the limited period the tenant will have to vacate
the premises. No judicial proceedings be required for this eviction;
The failure to vacate at the end of the limited period should be liable for

iv.

heavy penalty.
`It is expected that this provision will bring in a large pool of transient supply of rental
housing in the market.
It is proposed to create three types of tenancies in the controlled rental housing market
(i) long term tenancy extending over a period of 20 years or more; (ii) limited period
tenancy extending upto a period of five years; (iii) all others specifying no period of
tenancy.
Under the proposed scheme (i) is exempted from most of the provisions of the
rent control act during the contracted period of twenty years. It is believed that the
security of tenure extended to the tenant under this provision compensates for the
partial non-protection of the tenant under the Act. The limited period tenancy is
already provided for in the Delhi Rent Control Act, 1958.
It is believed that providing for a plurality of typologies of tenancies will provide
incentives for larger supply of rental housing in the market, since different factors
motivate different suppliers of rental housing.9

Other Provisions
1. Make rent control act as a permanent Act The rent control act in most states is
a temporary Act and is extended every few years. The failure to extend can
9 Supra

result in unintended suspension of the Act and consequent chaos in the rental
housing market. Since there is no intention to abolish the Act even in the
conceivable long run it might be better to make the Act a permanent Act;
2. Vest administration of the Act in the State Housing Department The
adjudication of rent control act falls under different departments in different
states. If Rent Control/act is to be used as an instrument of housing policy and
integrated with other instruments, it is important that the entire operation of
the Act (legislation, implementation and adjudication) is with the Ministry or
department of housing. This reform will also improve the efficiency of the
Act.
3. Abolition of provision for accommodation control The provision of
Accommodation control is a feature of Rent control Act in some states. This
provision was introduced at a time when there was dire need to house army
personnel and such officials in times of scarcity of housing and is out dated.
Of all the provisions this provision has turned out to be the most expensive to
operate and most difficult to operationalise. The provision should be abolished
with immediate and retrospective effect. All properties which have been leased
under this provision should be treated at par with other tenancies under the
Rent control Act. If however, certain states believe that there is need to retain
this provision it may be continued for a .limited period or as decided by the
state Government or notified areas.
4. Limit the inheritability of tenancy to all legal heirs who had been living with
the deceased and dependent upon him and do not own a house in the urban
area. In case of minor children, the right of inheritability to be applicable only
for a limited period. In case the heir owns a house in the urban area, he is to be
permitted one years time to vacate the premises.
5. Subletting to be permitted only with the written permission of the landlord.
The illegal sub-tenancy to be converted into lawful ones within a given period,
if landlord agrees;
6. Rent control provisions to be extended by State Legislature to private
properties in cantonment areas in consolation with the Central Government as
provided in the existing Cantonments (Extension of Rent Control Laws) Act,
1957. The properties of cantonment Boards themselves should be exempted
from the provisions of RCA.
7. All tenancies to be registered;
8. Provisions relating to charging of premium to be deleted from the Act;

9. Part vacation of the house to be made feasible;

a) if the tenant does not require whole of it and subject to the landlord
agreeing;
b) under eviction proceedings for bonafide reasons; if the landlord is
agreeable to get part of the house vacated;
The old Acts could be repealed by state Governments rather than
amended as the drastic amendments required may lead in some cases
to confusion and make the Act very complicated.

Recent Development : Landlords can evict shop tenants: SC

NEW DELHI: For 50 years, tenants in shops and commercial premises in many prime areas
of Delhi have had the upper hand over landlords. They lived without fear of eviction and paid
a paltry rent as they were protected by laws that froze the amount negotiated decades ago.
This special protection was because the law said that a tenant could be asked to vacate only
residential
premises, and not commercial property even if the premises were required for personal use.
But all this has changed.
The Supreme Court has given a judgment that would help landlords evict tenants in prime
commercial zones like Connaught Place, Karol Bagh, South Extension and Walled City who,
in most cases, have been paying a few hundred rupees as rent for decades.
The rent law - Delhi Rent Control Act, 1958 - was a handicap for the landlord as he could
seek eviction of the tenant only from residential premises, that too provided he proved this
was required for his personal need.
The attempts to evict the tenants from the shops had been frustrated for nearly 30 years as the
rent law did not permit recovery of the premises let out for shops even on the ground of
bonafide personal need.
The court said the restriction on eviction of tenants from commercial premises was inserted in
the law 50 years ago mainly because of the limited commercial space available in the city at
that time. But that was a long time back.
Now the scenario has undergone a sea change and a fairly large number of buildings and
premises were now available on rent for non-residential and commercial purposes.
Restricting landlords from seeking eviction of tenants from shops was no longer justified, the
Bench said.
The 1995 Delhi Rent Control Act, which had a similar provision in favour of landlords, could
not be notified despite receiving presidential assent as the government was pressured by the
powerful traders lobby.

Section 14(1)(e) of the 1958 Act allowed a landlord to make an application for recovery of
possession of a residential premises on the ground that "the premises let out for residential
purposes are required by the landlord for occupation as a residence for himself or any other
member of his family dependant on him... and that the landlord has no other reasonably
suitable residential accommodation".
The new law would now read: "That the premises are required bonafide by the landlord for
himself or for any member of his family dependant on him... and that the landlord has no
other reasonably suitable accommodation".
Crucially, the apex court has deleted the word 'residential'. This makes the tenant eviction
process apply with same rigour to rented premises - both residential and commercial.
Though the court removed the word 'residential' from Section 14(1)(e) of the Delhi Rent
Control Act, it tried to strike a balance by laying down that recovery of rented premises still
needed the landlord to prove that he needed it for his use and lacked alternate suitable
accommodation.
Reversing a full Bench judgment of the Delhi High Court which had refused to alter the law
in favour of the landlords on the ground that it had been in force for more than 45 years, the
apex court said the HC failed to see that the provision in the 1958 Act has outlived its
utility.10
Writing the 64-page judgment for the Bench, Justice Singhvi said the high court failed to
notice the differential treatment in law for residential and commercial premises, even though
the rationale for it had long ceased to exist.
Removing this anomaly and striking down the differential approach in law, a Supreme Court
bench comprising Justices B N Agrawal and G S Singhvi said landlords could now seek
eviction of tenants from residential as well as commercial premises on the ground of proven
10 http://timesofindia.indiatimes.com/city/delhi/Landlords-can-evict-shoptenants-SC/articleshow/2960716.cms visited 20/11/15 @ 23:45 pm

personal need.
Through the judgment, the court came to the rescue of the family of a landlady who wanted
to demolish the premises, part of which was let out for shops. She wanted to build a new
structure to accommodate a family growing in size over the years.

CASE LAWS :
In the case of Vishwant Kumar v. Madan Lal Sharma and another, reported
in MANU/SC/0324/2004 : (2006) 4 SCC 1, the Apex Court considered the question of
difference between the rights of a tenant under the Rent Act and the rights of a landlord. It has
been held that the right of a statutory tenant to pay rent in exceeding the standard rent or the
right to get the standard rent fixed are the protective rights and not the vested rights. It holds
that on the other hand, the landlord has rights recognized under the law of contract and the
Transfer of Property Act and the date on which the Rent Act was withdrawn, the suspended
rights of the landlord revive.
The Apex Court in Ambalal Sarabhai Enterprises Ltd. v. Amrit Lal and Co., reported
in MANU/SC/0488/2001 : (2001) 8 SCC 397, concerning the rights of landlord under
Section 14(1)(b) of the Rent Act. It was held that a ground of eviction based on illegal subletting under Section 14(1)(b) of the Rent Act would not constitute a vesting right of the
landlord, but it would be a right within the meaning of Section 6(c) of the General Clauses
Act, if proceeding for eviction is pending. It has been held that the tenant has no vested right
under the Rent Act, as the tenant has only a protective right.
In Satyawati Sharma (Dead) by LRs . v. Union of India and another
2008 (5) SCC 287 it was held by the Supreme Court that Section 14(1)(e) of the 1958 Act is
violative of the doctrine of equality embodied in Article 14 of the Constitution of India
insofar as it discriminates between the premises let for residential and non-residential
purposes when the same are required bona fide by the landlord for occupation for himself or
for any member of his family dependent on him and restricts the latter's right to seek eviction
of the tenant from the premises let for residential purposes only.
However, the aforesaid declaration should not be misunderstood as total striking down
ofSection 14(1)(e) of the 1958 Act because it is neither the pleaded case of the parties nor the
learned counsel argued that Section 14(1)(e) is unconstitutional in its entirety and we feel that

ends of justice will be met by striking down the discriminatory portion of Section 14(1)(e) so
that the remaining part thereof may read as under :"that the premises are required bona fide by the landlord for himself or for any member of his
family dependent on him, if he is the owner thereof, or for any person for whose benefit the
premises are held and that the landlord or such person has no other reasonably suitable
accommodation."

Conclusion and Findings:

The rental laws in India need to be revised to protect the owner and his/her property from the
tenant. Special areas of focus should be on terminating old tenancies, removing constraints on
increase of rentals and empowering owners in the sense of being able to reclaim their
properties without any court proceedings.
The market forces should be allowed to determine the rental amounts and the owner must
have full protection for his/her property. This will go a long way in providing security to the
landlord and also reduce the deposit amount required with the lease agreements.
If these laws are enacted and strictly enforced, there is every chance that more investors will
want to enter the real estate market to utilize the rental fees as income. This is especially true
for the commercial sector. The tax laws also need to be revised so that renting of properties
becomes a financially viable option. Amendments in the Rent Acts of several states are a
progressive move.
SOME GENERAL SUGGESTIONS :
1. Know what your expectations are before searching for a property: If your requirements
arent offered at a particular property, then move on. Dont expect a landlord to add an
unreasonable amount of amenities or upgrades to an existing rental. There are often other
units available that will meet all of your needs.
2. Submit completely accurate rental applications regardless of your shortcomings: Do not
overstate your income or lie about credit problems. Landlords are increasingly open to
working with challenged credit. Providing a clear explanation as to why your credit has
suffered and expressing your desire to improve the situation will go a long way to sway a
decision.

3. Ask the right questions: Those questions are the ones most important to you. In most cases,
landlords and agents are not required to disclose some information that may be important to
you. Do not be shy when searching for a home to rent. Ask as many questions as necessary to
make sure that you are comfortable with the decision you are making.

4. Get it in writing: If a landlord has promised a repair, new carpet, new appliances, or
anything else will be done as a condition of your lease, then be absolutely sure to get it in
writing, preferably on the lease document. Anything less opens up the chance for
miscommunication and leaves an opening for problems.
5. Read your lease completely: This is an important process. You are making legally binding
guarantees regarding payments, upkeep, repairs, etc. Read it thoroughly before you sign it. If
possible, ask for a copy the day before signing the lease so that you have enough time to read
and think about any potential questions.
Move-in time
6. Complete or request a walk-through to assess any existing wear or damage: This will
alleviate many disputes at the time of move-out. Make sure this is done thoroughly and ask
for a copy for your records.
7. Make sure that you know all of the pertinent property information (utility info, garbage
day, mailbox number, instructions for alarms, entry systems, sprinkler systems, homeowners
association rules, etc.).
By collecting all of this information upfront you can eliminate several calls to your landlord
over the first weeks of tenancy. When landlords receive a flood of calls from a new tenant
they instantly start to think of that tenant as high maintenance. This puts an instant strain on
the relationship and can set up future problems.
During your tenancy
9. Pay your rent on time: Thats easy enough when everything is going well, but what about
when things are not? The best option is to contact the landlord as soon as you see a problem
arise, and work out an agreement to get on track. Very few landlords will want to evict a
tenant who they believe honestly wants to pay but is having a short-term problem.
The worst option is silence. A nonpaying, non-communicating tenant will and should be dealt
with harshly.

10. Be reasonable with your requests: Most landlord-tenant issues that dont involve money
center around tenant maintenance requests that they feel are not handled adequately by their
landlords.
There are many cases where the tenants are absolutely in the right and landlords have
neglected their duty to provide clean, safe housing. However, in many other instances the
requests made by tenants are completely unreasonable, and by utilizing a bit of patience and
thought these issues can be resolved reasonably.
Handle very minor issues on your own. Almost any tenant can replace a light bulb, furnace
filter, or smoke detector battery. They can tighten a door knob or put a closet door back on its
track. However, these types of tiny issues constitute a huge number of service calls and
maintenance costs for landlords.
Above all else, its important to remember that you are ultimately dealing with another
human being. If you are speaking with a property manager or maintenance tech you are
dealing with someone who can choose to help you or ultimately push your concerns aside.
The goal should be to get your questions answered and problems resolved, not to make as
much noise as possible.

BIBLIOGRAPHY:

ACTS:
1.
2.
3.
4.
5.

Transfer Of Property Act 1882

Delhi Rent Act 1995
Delhi Rent Control Act 1958
Indian Contract Act 1872
Specific Relief Act 1963

BOOKS:
1.
2.
3.
4.

Law of contracts third edition S.C Mitra

Mitras Law of possession and ownership of property. (2007 edition)
Capitals Delhi Special Laws.
Digest of landlord and tenant cases.

WEBSITES:
1.
2.
3.
4.

www.manupatra.in
www.indiankanoon.org
www.legalservicesindia.com
http://www.hindustantimes.com/india/new-law-framed-to-do-away-with-tenancytroubles-rental-housing-all-set-to-grow/story-uwG8C50cXjOL7zgNckctpM.html
5. http://articles.economictimes.indiatimes.com/2005-0911/news/27509857_1_landlords-and-tenants-bombay-rent-act-building
6. www.lawmirror.com