Awaiting official sanction, the Act is meant to bring transparency, fix accountability and promote fairness in the rental housing segment. What are the salient features?
By Kiran Bhardwaj
Among the myriad issues raised by the onset of the Covid-19 pandemic is the one to do with landlords and tenants in the National Capital Territory (NCT). Many of those paying rents were affected by salary cuts or job losses, which brought up demands for deferring/lowering rents, as well as evictions. That problem brought into focus the existing Delhi Rent Act, 1995, which provided for the regulation of rents, repairs and maintenance and evictions relating to premises and of rates of hotels and lodging houses in the NCT.
Now a new Model Tenancy Act, 2019, which is yet to be notified by the government, establishes a Rent Authority for regulating renting of premises in an efficient and transparent manner and to balance the interests of owners and tenants. It establishes an adjudicating mechanism for speedy dispute resolution and to establish Rent Court, Rent Tribunal as well as Rent Authority to decide issues with regard to landlord and tenant matters. The Model Tenancy Act is applicable, prospectively.
Delhi has been through numerous such Acts before. Earlier, the laws applicable to Delhi were the New Delhi House Rent Control Order, 1939; the Delhi Rent Control Ordinance, 1944; the Delhi and Ajmer Marwara Rent Control Act, 1947; the Delhi and Ajmer Rent Control Act, 1952; or the Delhi Rent Control Act, 1958. It is a settled law in the judgments as reported in the case of Damadilal & Ors vs Parashram & Ors, 1976 (4) SCC 855 and Gian Devi Anand vs Jeevan Kumar & Ors, 1985 (2) SCC 683 that statutory tenancies under both commercial and residential tenancies can be inherited. Tenants in possession of rented premises who face eviction have the option of going to court on the grounds that the landlord has other property in his possession and the rented property is not required for a genuine purpose.
There is a provision under Section 19 to 22 of the Delhi Rent Control Act, 1958, for recovery of possession for occupation and re-entry of the evicted tenant in possession of the premises. For bona fide requirements, landlords can file a case for residential as well as commercial properties. The courts are under legal compulsion to balance the rights of the landlords and the obligations of the tenants towards each other.
The Delhi Rent Control Act, 1958, gives protection to the tenants who are paying less than Rs 3,500 per month. An Amendment in 1988 allowed the landlords to increase the rent by 10 percent every three years. Even today, the law says landlords cannot evict the tenants unless they are in extreme circumstances nor can they amend the lease.
With the Model Tenancy Act, 2019, the scenario for rented premises will witness a sea change. The new Tenancy Act describes the rights and duties of the landowner and the tenant in a detailed manner and creates trust and confidence between the landlord and tenant. Registration of contract between the landlord and tenant is compulsory. One copy must be given to the rent control authority and the authority will be informed about the rent and duration of the rented property.
Where the landowner and the tenant fail to jointly present a copy of the tenancy agreement, such landowner and tenant shall separately file the particulars about such agreement within a period of one month from the date of expiry of the period and the rent authority will give a unique identification number to the parties and upload on the website in a vernacular language.
In case a tenancy for a fixed term ends and has not been renewed and the premises have not been vacated by the tenant at the end of such tenancy, the tenancy shall be deemed to be renewed on a month-to-month basis on the same terms and conditions as were in the expired tenancy agreement, for a maximum period of six months and thereafter, a tenant will be a tenant in default and liable to pay the rent as provided in Section 22 of this Act. There is a capping of security which the landlord can take from the tenant, which is a maximum of two months’ rent in case of residential property and minimum of one month’s rent in case of non-residential property.
The tenant is entitled to get one original signed copy of the agreement from the landlord within 15 days of the agreement being signed by both the landowner and the tenant. On paying rent, the tenant is entitled to get acknowledgment of receipt.
There are certain obligations on the landlord and tenant for repairs, maintenance, etc. No landowner or property manager or tenant either by himself or through any person shall cut off or withhold any essential supply or service in the premises occupied by the tenant or the landowner.
A landowner or the property manager may enter a premise during daytime in accordance with written notice or notice through electronic medium with notice served to the tenant at least 24 hours before the time of entry for inspection or repair or for any other reason specified in the agreement.
A landlord cannot evict a tenant during the continuance of tenancy. The landlord can make an application before the rent court for the recovery of possession of the premises if rent is not agreeable, the tenant has not paid the arrears in full of rent payable for two months and the tenant has parted with the possession of whole or any part of the premises without obtaining the written consent of the landowner. If the tenant corrects the situation within one month of the matter reaching court, they will be allowed to stay, if this is their only default in the course of that year.
In case the premises are not fit for habitation, the tenant would be within his right to leave it after serving a 15-day notice period. The tenant can be evicted if he has misused the premises even after receipt of notice from the landowner to stop causing public nuisance or causing damage to the property or doing illegal activity.
The premises can also be vacated for the purpose of carrying out any repairs or building or re-building or additions or alterations or demolition and thereafter, the tenant is allowed to re-enter subject to the mutual agreement submitted with the Rent Authority.
The landlord is entitled to get compensation of double of the monthly rent for two months and four times of the monthly rent thereafter, for use and occupation of a premise by a tenant who does not vacate the premises after his tenancy has been terminated by order, notice or as per agreement.
The responsibility to maintain the premises lies with both the parties. The rent agreement will have to specifically mention who takes care of what, in case of damages. Tenants cannot sublet part or whole of the rented building without prior permission from the landlord.
The welcoming part of the Act is that it brings transparency, fixes accountability and promotes fairness in the rental housing segment by setting up a Rent Authority for disputes arising between a landlord and tenant.
—The writer is Advocate-on-Record, Supreme Court of India