Legal Considerations for Landlords: Rent Control Act and Eviction Laws in India

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Being a landlord in India entails various legal responsibilities and obligations. One crucial aspect that landlords must navigate is the complex landscape of rent control and eviction laws. These laws aim to strike a balance between protecting tenants' rights and ensuring fair treatment for landlords. This article provides an overview of the legal considerations landlords need to be aware of regarding rent control and eviction laws in India. Also, it answers various questions including ‘Can police be called to evict a tenant?’ and ‘How much can rent increase under the Rent Control Act?’

What is Rent?

Rent is a periodic payment made by a tenant to a landlord in exchange for the use and occupation of a property. It is typically agreed upon in a lease or rental agreement and can vary based on factors such as location, size, amenities, and market demand. According to Section 194-I of the Income-tax Act, 1961, the word "rent" is defined as “any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (including factory building), together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee.”   

Who is the Tenant?

The tenant is an individual who occupies a property under a lease or rental agreement. They pay rent to the landlord in exchange for the right to use and possess the property for a specified period of time, as outlined in the rental contract. According to Section 2(n) of the Model Tenancy Act, 2021, “Tenant, whether called lessee or by any other name, means a person by whom or on whose account or on behalf of whom, the rent of any premises is payable to the landlord under a tenancy agreement and includes any person occupying the premises as a sub-tenant and also, any person continuing in possession after the termination of his tenancy whether before or after the commencement of this Act; but shall not include any person against whom any order or decree for eviction has been made.”

Who is the Landlord?

The landlord is the owner or legal entity that owns a property and grants the right to use and occupy it to a tenant in exchange for rent. The landlord is responsible for maintaining the property, ensuring it meets legal requirements, and upholding the terms of the lease or rental agreement. As per Section 2(a) of the Model Tenancy Act, 2021, “landlord, whether called landowner or lessor or by any other name, means a person who receives or is entitled to receive, the rent of any premises, on his own account, if the premises were let to a tenant, and shall include –– (i) his successor-in-interest; and (ii) a trustee or guardian or receiver receiving rent for any premises or is entitled to so receive, on account of or on behalf of or for the benefit of, any other person such as minor or person of unsound mind who cannot enter into a contract.”

What is the Rent Control Act of 1948?

The Rent Control Act of 1948 is an Indian legislation that was enacted to regulate and control the rents and eviction of tenants in certain areas. The act aimed to protect tenants from arbitrary rent increases and unjust evictions by imposing restrictions on landlords. It established rent control authorities to determine fair rents, specified grounds for eviction and provided certain rights and safeguards for tenants. The act has been amended over the years, and its provisions may vary across different states in India.

What is a rental agreement in India?

In India, a rental agreement, also known as a lease agreement or rent agreement, is a legally binding contract between a landlord and a tenant. It outlines the terms and conditions under which the landlord rents out a property to the tenant. The rental agreement typically includes details such as the names of the landlord and tenant, property address, rent amount and payment terms, duration of the lease, security deposit, maintenance responsibilities, utility charges, and any specific rules or restrictions. It serves as a reference document that helps protect the rights and obligations of both the landlord and the tenant during the tenancy period. 

What are the Rights of Landlords under the Rent Control Act, 1948?

The rights of a landlord are a fundamental aspect of property ownership and rental agreements. These rights encompass the legal privileges and powers that landlords possess when leasing their property to tenants. They include the ability to set rental terms, receive rent payments, access the property for maintenance and inspections, and take action in cases of non-payment or lease violations. Understanding and asserting these rights is essential for landlords to protect their property and investment. However, these rights are also balanced by legal obligations to ensure fair and lawful treatment of tenants, promoting a harmonious and lawful landlord-tenant relationship. Below are the important rights of landlords under the Rent Control Act.

Right to Evict

Landlords have the right to evict a tenant but they have to give an appropriate reason for the same. Some of the reasons include breach of the rental agreement, misuse of property, using the property for personal use, subletting the property, and conducting illegal practices on-premises. This right is different from state to state which means a particular reason, let's say personal use of property, to evict a tenant is valid in one state but is invalid in another state. In most cases, the landlord approaches the court whereas a sufficient notice is required to be sent to the tenant before approaching the court.

Right to Charge Rent

The Rent Control Act, 1948, allows landlords, being the owner of the property, to charge rent to the tenant. Moreover, landlords are allowed to constantly increase the rent as per their choice because there is no specific law that defines an upper limit on the rent. A legal agreement should specify the stipulated increment percentage. Most probably, the rent is increased by 5% - 8% annually.    

Right to Temporary Repossession of Property

As per this right, a landlord can temporarily repossess the property to alter the property in any manner, improve the condition of the property, or make any changes to the property but the same should be done without causing any loss to the tenant. 

How much can rent increase under the Rent Control Act?

Owners of commercial as well as residential properties have the right to increase the rent. In the case of commercial properties, the rent is increased annually by 5-8% whereas in the case of residential properties, the owner can raise the rent by 10% after the lease expiry. While raising the amount of rent, the landlord should provide a prior written notice regarding the increase of rent, under Section 106 of the Transfer of Property Act, 1882. 

Where is the Rent Control Act not applicable?

The Rent Control Act may not be applicable to the property let-out:

• To foreign companies, international agencies, or international missions.
• To banks, corporations, or public sector undertakings that come under central or state acts.
• To private limited or public limited companies. 

What are the grounds for evicting a tenant in India?

The right to evict a tenant is typically restricted to specific grounds or reasons. These grounds are designed to protect tenants from arbitrary or unjust evictions, while still allowing landlords to reclaim their property under certain circumstances. Some of the common grounds for eviction of a tenant are:

• If the tenant fails to pay the rent for more than 15 days after the due date, as mentioned in the rental agreement.
• If the landlord or their immediate family members intend to occupy the rental unit as their primary residence.
• If the tenant allows subletting without permission. 
• If the landlord needs to carry out substantial renovations or repairs that would be impractical to perform while the unit is occupied.
• If the neighbors have complained to the landlord regarding the unpleasant activities of the tenant.
• If the landlord plans to convert the building into a new structure that requires demolishing the existing building.
• If the tenant violated the terms of the rental agreement such as engaging in illegal activities on the premises or causing significant damage.

However, there are usually specific procedures that must be followed while evicting a tenant on these grounds.

What is the process of evicting a tenant?

Eviction procedures in India are subject to stringent requirements aimed at safeguarding tenants' rights. Landlords must adhere to these procedures to avoid legal complications and ensure a lawful eviction process.

• Notice Requirements: Landlords must provide tenants with written notices specifying the grounds for eviction and the required remedy period, if applicable. The notice period may vary depending on the grounds for eviction and the terms of the lease agreement.
• Eviction Petition: If a tenant fails to comply with the notice or rectify the violation, landlords can initiate eviction proceedings by filing an eviction petition before the appropriate rent control authority or court. The petition must be supported by relevant evidence and documents. 
• Legal Representation: Engaging a qualified lawyer is advisable during eviction proceedings to ensure compliance with legal requirements and to effectively present the case before the rent control authority or court.
• Tenant Defenses: Tenants have the right to contest eviction and may present their defenses during the proceedings. Common tenant defenses include challenging the grounds for eviction, asserting procedural irregularities, or claiming the violation of their rights.
• Appeal and Execution: If the rent control authority or the court grants an eviction order, the tenant may have the right to appeal the decision. Once the eviction order becomes final, landlords can seek its execution through the appropriate legal channels.

What not to do while evicting a tenant?

While evicting a tenant, the landlord should consider the following points:

• There must be an optional renewal provision included in the rental agreement, and the term of the agreement must not exceed 11 months.
• The landlord must mention an appropriate reason for eviction under the rental law of the state, the place where the rented property is situated.
• Without providing an eviction notice to the tenant, a landlord cannot remove them.
• Evictions must not be carried out using illegal methods by the landlord. The methods may include throwing away the goods of the tenant, shutting off basic services, imposing penalties that are not mentioned in the agreement, and others. As these methods are criminal offences, a tenant can pursue charges against the landlord if found guilty.
• A property lawyer should be available while establishing a rent agreement and must include the amount of rent, termination of the rent agreement, and so on.