Module 5, 6 Rent Control Act
Module 5, 6 Rent Control Act
It is the practice of imposing a maximum ceiling upon the rent in a particular locality. Rent
Control Laws prevent the landlord from charging exorbitant rents and evicting tenants at will.
While most economists agree that rent controls are bad taking note that it has done
deregulating rents, especially in India. There is diversity of rent control laws existing in
various states and countries that makes the task of policy makers much more difficult.
Rent controls were introduced in the early 1900s in the United States and some other parts of
the world to check uninhibited rent increases and tenant eviction during wartime housing
emergencies. After World War II. there was a sudden increase in the demand for rentable
housing from soldiers returning home. With industrialization and corresponding urbanization,
there was an increase in rural-urban migrations. Rent Control Acts (RCAs), under various
names were introduced in many countries.
These were called the first generation rent controls. Those introduced later were called the
second generation rent controls or soft rent controls. The first rent control legislation in India
was introduced immediately after the First World War in Bombay in 1918. It was followed
by similar legislations for Calcutta and Rangoon in 1920. By the end of the Second World
War almost all the major cities and towns in the countries were covered by rent control
measures. They were all purely temporary measures to provide relief to the tenants against
the demand of exorbitant rent and indiscriminate eviction by the landlords due to scarcity of
houses in the urban areas.
HISTORICAL BACKGROUND
• Before the passing of the Transfer of Property Act, 1882 the landlord-tenant relationship
was essentially contractual in nature. After the advent of Transfer of Property Act in 1882
the concept of contractual letting was preserved to a large extent under the aforesaid Act.
• Chapter V of the Transfer of Property Act, 1822 provided for the law of leases which
continued to govern the landlord- tenant relationship in different areas till the year 1939.
• Thus, it is evident that the Transfer of Property Act was the first step towards curtailing
the concept of free contractual tenancies.
• It was the general law applicable to landlords and tenants but it could not resolve all the
issues related to tenancy rights, scarcity of accommodation i.e. shortage of housing, etc
therefore the need of having Rent control legislation came into being.
ADVANTAGES AND DISADVANTAGES OF RENT CONTROL
• The main arguments against rent control include:
• Rent control reduces the supply of decent housing, as landlords would rather
convert a building to condos or adapt it to commercial use than abide by a law
that limits their profits
• Investment in new rental housing screeches to a halt
• Maintenance of buildings under rent control is lax or non-existent because of
the poor return on investment for landlords
• The main arguments for regulation include:
• Rental prices in many cities are rising far faster than wages for moderate-
income jobs
• Rent control may enable moderate-income families and people on fixed
incomes to live decently and without fear of a personally catastrophic rent hike
• Neighbourhood are safer and more stable with a base of long-term residents in
rent-controlled apartments
OBJECTIVES
An Act to provide for adjudication of matters relating to rent by a Tribunal and to
promote leasing of accommodation by balancing the interests of landlords and tenants.
• The CG Rent Control Act is meant mainly to protect the tenants from frivolous
evictions.
• It also protects the legal right to property of Landlords.
• A landlord has a common law right to evict the tenant either on the termination of the
tenancy by efflux of time or for default in payment of rent or other grounds after
giving notice under the Act.
• This broad right has been curtailed by the CG Rent Control Act with a view give
protection to tenants
The two main objects of the CG Rent Control Act are:
• 1. To give tenant fair rents and protection from the unreasonable eviction.
• 2. To ensure fair return to landlords and giving them right of eviction for limited
purpose.
It is a composite legislation in the sense that while providing protection to the tenants, who,
under common law including Transfer of Property Act, could be evicted from the premises
let out to them, at any time by the landlord on the termination of their tenancy, it restricts the
right of the landlords to evict the tenants at their will. This Act thus beneficial as also
restrictive in nature.
The SC felt that the courts are therefore, under a legal compulsion to harmoniously read the
provision of the Act so as to balance the rights of the landlord and the obligations of the
tenants towards each other.
PURPOSE
• The protection to tenants against indiscriminate eviction by unscrupulous landlords.
• On the other hand, a tenant who misuses any rented premises or defaults in payment
of rent ought to be evicted.
• Eviction of a tenant may also take place when the landlord himself requires the
premises for his bona-fide use.
• The essence of ubi jus ibi remedium demands that if the tenant has a protection
against unlawful eviction, then the landlord must also be entitled for recovery of
possession on certain grounds. The law has to be balanced for both the parties as the
sanctity of the landlord-tenant relationship is at stake.
• The statutory grounds for eviction are to be carefully drafted so that both the sides are
equally placed. Law must not favour either the landlords or the tenants.
EXTENT
• It shall extent in first instance to such of the Municipal areas which are comprising
the District Headquarters in the State and later on to such or other Municipal
area~ or any areas within the state as the State Government may, by Notification
in the Official Gazelle, specify from time to time.
IMPORTANT DEFINITIONS
SEC 3. EXEMPTIONS
Nothing in this Act shall apply to. -
1. Any accommodation belonging to or owned by any department of Government and/or
Board and/or Corporation promoted by and/or owned by the Government.
2. Any other building and/or category of building(s) specifically exempted in public
interest by the Government through notification
SEC 4. TENANCY AGREEMENT.
1. Notwithstanding anything contained in Section 107 of the Transfer of Property Act,
1882 (Central Act 4 of I 882), no person shall, after the commencement of this
Act, let or take on rent any accommodation except by an agreement in writing.
2. Where, in relation to a tenancy created before the commencement of this Act- (a) an
agreement in writing was already entered into shall be filed before the rent
Controller. (b) no agreement in writing was entered into, the landlord and the
tenant shall enter into an agreement in writing with regard to that tenancy and
file the same before the rent controller.
Provided that where the landlord and the tenant fail to present jointly a copy of
tenancy agreement under clause (a) or fail to reach an agreement under clause (b)
such landlord and the tenant shall separately file the particulars about such tenancy.
3. Every agreement referred to in sub-section (1) or required to be executed under sub-
section (2) shall be in such format and in such manner and within such period as may
be prescribed.
SEC 5. RENT TO BE AS AGREED.
1. The rent payable for any accommodation shall, subject to other provision of this Act,
be such as may be agreed upon between the landlord and the tenant and it shall
not include the charges payable for amenities which may be agreed upon
separately; and shall be payable accordingly.
2. Unless agreed otherwise every tenant shall pay the rent by the fifteenth day of the
month next following the month for which the rent is payable.
RENT CONTROL TRIBUNAL
• A Rent CT, and not any other Civil Court, shall have the jurisdiction to hear and conclude
an application regarding rental disputes between a tenant and an owner. The former, to
discharge its function under the CGRCA, will have the same powers as bestowed upon a
Civil Court by the Code of Civil Procedure, 1908.
• Matters regarding the question of ownership and the title of premises shall be beyond the
jurisdiction of a Rent Court.
• The Indian rental housing market needs a speedy and transparent grievance redressal
system to encourage more homeowners to let out their properties and to reduce the
apprehensions of tenants with regards to unfair evictions and arbitrary rental hikes.
• The Rent CT, is also crucial to achieving the Central Government’s ‘Housing for All’ by
2022 mission, since the presence of the said Court may encourage more owners to put
their properties out for rent, thus increasing the supply of the same.
• Purchasing a home continues to be a massive challenge for many in urban India, and
therefore, renting a home is vital to meet the demand for housing.
• As per a report by the Green Rating for Integrated Habitat Assessment Council (GRIHA),
there was a shortage of urban housing within India to the tune of 18.78 million units in
2018. Since the construction of the required units is challenging due to land scarcity
issues, rental housing presents an economically feasible resolution.
• A Rent Court is also increasingly important in the current context of the COVID-19
outbreak in the country.
• With the ongoing economic slowdown reducing the ability of many tenants to pay rent,
several State governments declared rent relief measures to look out for the interests of
tenants and put a period on the rental incomes of property owners.
• However, not all landlords can afford rental waivers or deferrals, especially some senior
citizens whose survival largely depends on rental income. Therefore, at the intersection of
real estate and an economic slowdown, as landlords and tenants struggle with the
financial fallout of delayed or no rent, a Rent CT provides a glimmer of hope through its
robust grievance redressal mechanism, by aiming to settle disputes in a time bound
manner.
SECTION 6. Constitution of the Rent Control Tribunal
• (1) The State Government shall by notification constitute, within thirty days of this Act, a
Tribunal in terms of Article 323-B of the Constitution, to be called as Chhattisgarh Rent
Control Tribunal, to give effect to the provisions of this Act, and for the
adjudication or trial of any disputes, complaints, or offences with respect to rent, its
regulation and control and tenancy issues including the rights, title and obligations
of landlords and tenants.
– Explanation. - Matters relating to transfer of property and/or disputes regarding
title over any property shall continue to be considered under relevant laws by the
courts of law.
• (2) The State Government shall appoint the Chairman of the Rent Control Tribunal, a
retired Judge of the High Court or serving or retired District Judge not below the
rank of Super Time Scale.
• (3) The Tribunal shall have such members with such qualification, as the State
Government may prescribe.
• (4) The State Government shall appoint an officer as the Registrar of the Tribunal,
who shall not be below the cadre of Civil Judge Class-I or the rank of Deputy
Secretary to the State Government.
• (5) From the date, the Tribunal becomes functional, which date shall be published in the
State Gazette, the jurisdiction of all courts, except the jurisdiction of the Supreme
Court under Article 136 of the Constitution, shall stand excluded in respect of all
matters falling within the jurisdiction of the Tribunal:
• (6) The Tribunal shall have its headquarters at Raipur and the State Government
may, by notification, fix such other places for hearing of matters by the Tribunal, as
it deems fit.
• (7) The terms and conditions of the service of the Chairman and members of the Tribunal
shall be such as may be prescribed by the State Government.
SECTION 7: ESTABLISHMENT OF RENT CONTROLLER
1. For every district, the State Government shall appoint one or more officers not
below the rank of a Deputy Collector, as Rent Controller with territorial
jurisdiction as to be specified by the District Collector.
2. Rent Controller shall be subordinate to the Rent Control Tribunal.
SECTION 8: POWERS AND FUNCTIONS OF RENT CONTROL TRIBUNAL
I) The Rent Control Tribunal, shall have such powers as the Government may by
notification vest in it, which shall include the following: -
(a) Enabling and ensuring the active existence of Rent Controller(s) at all
times for due fulfilment of the purposes of this Act.
(b) Functioning as appellate authority, to consider applications of all
person(s) aggrieved by any order of the Rent Controller.
Explanation- The Rent Control Tribunal shall exercise such powers as was
exercised by the High Court in adjudicating matters under the repealed Act.
II) The Rent Control Tribunal shall have powers to punish for contempt of its
authority, as if it were a High Court.
SECTION 9: POWERS AND FUNCTIONS OR RENT CONTROLLER.
The Rent Controller shall exercise such powers, perform such functions and discharge
such responsibilities within its territorial jurisdiction, as the Government may by
notification vest in him, which shall include the following:
(a) Reconciling dispute(s) between landlord and tenant.
(b) Securing the rights of landlords and tenants as available to them under this Act.
(c) Enforcing the obligations enjoyed upon landlords and tenants under this Act.
All proceedings before the Rent Controller shall ordinarily conclude within six months from
the date of first appearance of the Respondent in response to the summons issued for his
appearance in the case or from the date on which the respondent is set ex-parte.
SECTION 10. PROCEDURE TO BE FOLLOWED BY RENT CONTROLLER(S)
AND RENT CONTROL TRIBUNAL.
• (1) The Rent Controller and the Rent Control Tribunal shall not be bound by the
procedure laid down by the Code of Civil Procedure, 1908 (Central Act 5 of 1908),
but shall be guided by the principle of natural justice and subject to other
provisions of this Act or the Rules made thereunder and shall have powers to
regulate their own procedure, and for the purpose of discharging their functions
under this Act they shall have the same powers as are vested in a Civil Court under
the Code of Civil Procedure, 1908 (Central Act 5 of 1908) while trying a suit or an
appeal in respect of following matters, namely :-
(a) summoning and enforcing the attendance of any person and examining him on
oath;
(b) requiring the discovery and production of documents;
(c) reviewing its decision;
(d) issuing commissions for the examination of witnesses or documents;
(e) dismissing petition for default or deciding it ex-parte;
(f) setting aside any order of dismissal of any petition for default or any order passed
by it ex-pane;
(g) bringing legal representatives on record; and
(h) any other matter as may be prescribed.
• (2) Rent Control Tribunal shall not grant any adjournment without written
application and recording the reasons therefor in writing.
• (3) Any proceeding before the Rent Control Tribunal or Rent Controller shall be
deemed to be a judicial proceeding within the meaning of Sections 193 and 228
and for the purpose of Section 196 of the Indian Penal Code, 1860 (Central Act 45
of 1860) and the Rent Controller shall be deemed to be a Civil Court for the
purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure,
1973 (Central Act 2 of 1974).
SECTION 11: EXECUTION OF THE ORDER.
(1) The Rent Controller shall, on application of any party, execute, in the manner prescribed,
a final order or any other order passed under this Act by Adopting any one or more of the
following modes, namely: -
(a) attachment and sale of the movable or immovable property of the opposite party;
(b) arrest and detention of the opposite party;
(c) attachment of any one or more bank accounts of the opposite party and satisfaction
of the amount of order to be paid from such account;
(d) attachment of salary and allowance of a Government Servant or employee of any
Nationalized Bank, Local-Authority, Corporation, Government Company;
(e) appointing any advocate as Commissioner on such remuneration as may be fixed
or deputing any officer of the Tribunal or local administration or local body for
execution of the order.
(f) delivery of possession of the premises to the applicant.
(2) The Controller may, in order to execute the final order or any other order passed under
this Act require the help from the local administration or local body or the police.
(3) If the tenant does not vacate the premises within three months of the date of issue of
certificate for recovery of the possession, he shall be liable. from the date of issue of
certificate for the recovery of possession to pay mesne profits at the rate of 2 times the rent in
case of accommodations let out for residential purposes, at the rate of 3 times the rent in case
of accommodations let out for commercial purposes and at the rate or 3 times the rent in case
certificate for recovery of immediate possession has been issued.
(4) The rent Controller shall conduct the execution proceedings in relation to a final order or
any other order passed under this Act in summary manner and dispose of the application for
execution made under this section within forty-five days from the date of service of notice on
opposite party.
Explanation- Filing of an appeal or other proceeding against the order of issue of
certificate for recovery of possession or immediate possession will not save the tenant from
his liability to pay mesne profits, at the rates specified under sub-section (3), unless
specifically ordered otherwise by the Appellate Rent Controller or the Court before which
such an order is under challenge and if the order issue of recovery certificate is finally
maintained, the tenant shall be able to pay mesne profits at the rates specified under sub-
section (3) from the date on which the recovery certificate was initially issued.
The principle behind mesne profits is that a trespasser is not allowed to use another person's
land without compensating the landowner. The landowner does not need to have suffered any
loss. The amount of mesne profits for which the trespasser is liable is the amount equivalent
to the ordinary letting value of the property.
SECTION 12: Rights and Obligations of Landlords and Tenants
(1) Every tenant shall have rights according to Schedule 1. The Tribunal and Rent
Controller(s) shall act at all times to secure to the tenant these rights.
(2) Every landlord shall have rights according to Schedule 2. The Tribunal and Rent
Controller shall act at all times to secure to the landlord these rights :
Provided that- (Principles of Adjudication)
(a) In case of any clash of interests of the landlord and the tenant, and/or any point of
doubt in respect of matters relating to rent, the benefit thereof shall be granted to the
tenant.
(b) In case of any clash of interests of the landlord and the tenant, and/or any point of
doubt in respect of matters relating to returning possession of the accommodation to
the tenant, benefit thereof shall be granted to the landlord.
(3) Every landlord shall have obligations according to Schedule 3. The Tribunal and Rent
Controller(s) shall act at all times to enforce upon the landlord these obligations.
(4) Every tenant shall have obligations according to Schedule 4. The Tribunal and Rent
Controller(s) shall act at all times to enforce upon the tenant these obligations.
(5) Any willful attempt or act by the landlord to undermine or deny to the tenant the
rights available to him in terms of Schedule 1 shall constitute an offence under this Act,
punishable with fine not exceeding Rs. 5,000 or simple imprisonment for a period not
exceeding three months or both.
(6) Any willful attempt or act by the tenant to undermine or deny to the landlord the rights
available to him in terms of Schedule 2 shall constitute an offence under this Act, punishable
with fine not exceeding Rs. 5,000 or simple imprisonment for a period not exceeding three
months or both.
(7) Any attempt by the landlord to neglect for unsubstantial and/or insufficient reasons the
obligations enjoined upon him in terms of Schedule 3 shall constitute an offence under this
Act, punishable with fine not exceeding Rs. 5,000 or simple imprisonment for a period not
exceeding three months or both.
(8) Any attempt by the tenant to neglect for unsubstantial and/or insufficient reasons the
obligations enjoined upon him in terms of Schedule 4 shall constituted an offence under this
Act, punishable with fine not exceeding Rs. 5,000 or simple imprisonment for a period not
exceeding three months or both.
SECTION: 13. Appeal. - (1) Notwithstanding anything to the contrary contained in this Act,
a landlord and/or tenant aggrieved by any order of the Rent Controller shall have the right to
appeal in the prescribed manner within the prescribed time to the Rent Control Tribunal.
(2) Appeal against an order of the Rent Control Tribunal shall lie with the Supreme Court.
SECTION 13(2) UNCONSTITUTIONAL!!
• Section 13(2) of the Chhattisgarh Rent Control Act, 2011 provides for an appeal to the
Supreme Court of India against the order of the Rent Control Tribunal, Chhattisgarh.
• Item 77 of the Union list gives power to the Parliament to legislate on Constitution,
organisation, jurisdiction and powers of the Supreme Court (including contempt of such
Court) whereas item 64 of the State list empowers the state to legislate on jurisdiction and
powers of all courts, except the Supreme Court, with respect to any of the matters in this
list
• The Supreme Court has held that a State Legislature cannot enact a law providing an
appeal directly to the Supreme Court of India.
• same is totally illegal, ultra vires the Constitution and beyond the scope of the powers of
the State Legislature.
SCHEDULE 2
Landlord's Rights available under the Act
1. Security of title over accommodation, irrespective of the period of the tenant's tenancy.
2. Right to demand and receive security deposit for an amount not exceeding three months’
rent.
3. Right to receive rent regularly on or before the due date, in the manner agreed to in the
agreement.
4. Right to receive annual increment in rent according to the Agreement, which rate shall
not exceed 5% in cases where monthly rent is Rs. 2000/- or less; and 10% in all other
cases.
5. Right to demand and receive amounts corresponding to any increase in the cost of
utilities like electricity, water, etc. enjoyed by the tenant.
6. Right to inspect the accommodation during daytime, with prior appointment of the
tenant, in the presence of the tenant or any male adult member of his family, known to
reside with him.
7. Right to add and/or improve and/or expand accommodation and/or increase amenities.
Provided, however, that if the addition/expansion was done without concurrence of the
tenant, the landlord shall not have right to enforce increased rent.
8. Right to undertake routine annual upkeep of the accommodation at a time suitable to
him, or, to allow to the tenant the option to do the routine annual upkeep of the
accommodation, against reimbursement of expenses, subject to such reimbursement not
exceeding one month's rent.
9. Right to make application to the Rent Controller seeking revision in rent and/or security
deposit at any point of time on justifiable and substantial grounds.
10 Right to apply to the Rent Controller seeking fair compensation from the tenant for
. damages caused to the accommodation, wilfully, negligently, or otherwise attributable to
the tenant.
11 Right to seek from the Rent Controller eviction of the tenant on the following grounds :
.
(a) If the tenant is a habitual defaulter in payment of rent and/or other dues.
(b) If the tenant causes, or allows to be caused, substantial damage to the
accommodation, for any reason whatsoever.
(c) If the tenant uses the accommodation for purpose(s) other than that for which it
was leased out.
(d) If the tenant becomes a social nuisance.
(e) If the tenant is convicted under any section of the Indian Penal Code.
(f) For carrying out major renovation work which is not possible with the tenant
housed in.
(g) On 3 months notice to the tenant in writing, if the accommodation is required for
own occupation and/or occupation by any member of the family including spouse,
parent(s), son(s), daughter, daughter(s)-in-law, son(s)-in-law.
(h) On 6 months notice to the tenant in writing, without any obligation to assign any
reason, but on the condition that the accommodation will not be leased out at a higher
rent for atleast 12 months thereafter:
Provided, however, that in case of the following special categories of landlords and/or
their spouse desiring the accommodation back for own use, the period of notice shall
be one month: current or retired government servants, widows, personnel of the armed
forces, persons coming to physical or mental handicap, and senior citizens (above the
age of 65 years).
12 Right to receive back the accommodation at the end of the tenancy in a shape and
. condition as good as it was at the start of tenancy, granting allowance for reasonable
weathering and aging.
SCHEDULE 3
LANDLORD'S OBLIGATIONS UNDER THE ACT
1. To admit a tenant only after executing agreement, duly notarized, as required under this
Act.
2. To file Information on [such proforma as may be prescribed] before the local Police
Station within 7 days of admitting the tenant.
3. To give proper receipt to the tenant against all payments received.
4. To allow the tenant quiet enjoyment of the accommodation and all rights included in
Schedule 1, so long as he fulfills his obligations set forth in Schedule 4.
5. To keep the accommodation and premises in a state of good and tenantable repair at all
times.
6. To dovetail the system for disposal of domestic garbage to the system designed by the
civic body and to explain the system clearly to the tenant at the start of tenancy.
7. To undertake with reasonable promptitude all major structural repairs attributable to
defects in construction and/or natural aging of the house.
8. To provide, wherever allowed by the State Electricity Board, a separate and exclusive
meter to record the electricity consumed by the tenant.
9. Never to wilfully cut off essential supplies like water and electricity to the
accommodation, or to cause such cut through another.
10 Never to exercise right to enter accommodation for inspection, in the absence of the
. tenant or when only female member(s) of the family are present and are objecting to
such entry.
11 To undertake annual upkeep of the accommodation, or to allow the tenant to do so by
. allowing him expenses on actual basis, subject to a maximum amount equal to one
month's rent.
12 Never to adopt or threaten to adopt extra-judicial methods for eviction to pressure the
. tenant to vacate the accommodation.
13 To refund security deposit to the outgoing tenant before closure of tenancy.
.
SCHEDULE 4
TENANT'S OBLIGATIONS UNDER THE ACT
1. To acknowledge at all times the title of the landlord over the accommodation, and to
respect and honor without demur his rights as set forth in Schedule-2.
2. To use the accommodation only for the purpose for which it was leased out to him.
3. Never to sub-let any portion of the accommodation, with or without monetary
considerations, formally or informally, with or without the permission of the landlord.
4. To protect and safeguard the accommodation, and all electrical, sanitary and other
fixtures forming part of the accommodation.
5. To attend to the minor, recurring replacements and repairs as may be necessary from
time to time, without expecting reimbursement from the landlord.
6. To keep the accommodation in a clean and hygienic state, and not to cause air, water
and/or noise pollution in or around the accommodation, in a manner that hurts peaceful
coexistence.
7. To dispose of garbage in accordance with the system designed by the municipality, and
in no case to litter it outside the accommodation and/or on to the road or other public
place.
8. To pay the security deposit, rent and other dues fully and regularly in the manner settled
with the landlord.
9. To compensate the landlord for any damage caused to the accommodation, wilfully or
otherwise, except for natural aging and/or weathering.
10 Never to become a social nuisance during currency of the tenancy.
.
Explanation. - 'Social nuisance' means doing or causing to be done any or all of the following
acts: drunken brawls, wife-bashing, prostitution, habitual late-night noisy socializing and/or
otherwise creation of abnormal noise construed by the neighbourhood as disturbance, spitting
in common facilities like staircase, storage of any hazardous stuff, storage of any stuff with
offensive odor that fouls up the surrounding, or that abnormally invites pests, littering of
garbage and/or letting loose waste water, spoiling the environment by doing or promoting
defecation and/or any act that has a bad and damaging social effect on the immediate
neighbourhood.