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.
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.
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