Maharashtra Rent Control Act

Property rentals are governed by the Rent Control Act, which was introduced specifically for each state.

Ensuring that neither the landlord nor the tenant's rights are violated by one another is the aim of the Act. Renting must adhere to the state's particular regulations, whether it is for residential or commercial use.

The Rent Control Act across different states is pretty much similar with some minor differences.

Today, this article will explore the Maharashtra Rent Control Act of 1999 (MRCA), how it changed it has changed the old rent control laws and its impact on the state.

Duties of tenants and landlords under the MRCA

The Maharashtra Rent Control Bill of 1999 outlines the legal duties of both tenants and landlords:

• Rent conditions- The 1999 Maharashtra Rent Control Act permits the landlord to fix the rent and increase it by 4% yearly. Rent may be raised by 15% for improvements with the permission of 70% of tenants. It can also be increased by 25% for certain structural repairs and rising taxes, except for MHADA repairs (Maharashtra Housing and Area Development).

• Eviction condition- A landlord may regain possession of rented space under Section 16 of the MRCA if they can prove an adequate reason. This includes permanent buildings that aren't allowed, unpleasant activities, and improper usage by the tenant or those associated with them. If the premises are utilized improperly or for forbidden reasons, the landlord may also retake control of them.

• Guidelines for rebuilding- The landlords must meet several requirements to rebuild. According to Section 16(6) of the MRCA, they must carry out certain activities such as obtain sufficient funds, obtain building plans approved by the municipality, offer space in the new building to existing tenants with an equivalent carpet area, finish demolition within 90 days and construction within 15 months, etc.

• Responsible for property maintenance- Landlords are required to maintain the property in good condition as per Section 14 of the MRCA. Tenants may provide a 15-day notice if they ignore this duty. If the landlord does nothing, tenants may choose to fix things themselves and deduct up to 25% of the yearly rent from their rent.

• Incorporation of the Pagdi system as law- Section 56 of the MRCA governs the Pagdi system in Mumbai which ensures that tenants pay minimal rentals regardless of market pricing. For example, some tenants in South Mumbai continue to pay 500 rupees a month, even though market rates might reach 60,000 now.

• Transfer of tenancy- Section 56(i) of the MRCA allows tenants to receive compensation for transferring tenancy rights, this compensation involves a cash payment. Landlords can charge fees for lease grants or transfers. The Draft Model Tenancy Act, which might alter rental rules, is being executed in various states but not in Maharashtra.

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Registration of Rent Agreement

Landlords and tenants are required to register their rental agreements by Section 55 of the MRCA and the Registration Act, of 1908. Section 55(2) places the landlord the duty of registration. According to Section 55(3) of the MRCA, the landlord who violates may be punished with up to 3 months in prison, a fine of up to Rs. 5,000, or both.

Conditions on the Usage of Rental Property

Residential homes owned by landlords are not allowed to be used for commercial reasons. By MRCA Section 30, the landlord is also unable to allow the tenants to do so. According to Section 30(2) of the MRCA, the landlord may be punished with a maximum 6-month imprisonment sentence or a fine of up to Rs. 10,000, or both, for any such violation.

Issue of Rent Receipt

Under Section 31 of the MRCA, Landlords are required to provide rent receipts to the tenants. Section 31 (3) specifies that they would be penalized up to Rs. 100 for every day that they are in default.

Provide required services

Landlords are not allowed to turn off basic utilities including water, electricity, lighting in corridors and stairwells, elevators, and sanitary facilities under Section 29 of the MRCA.

Tenants can file judicial action under Section 29(4) to force a landlord to restart services if they feel that the landlord violated this provision. The court's order stipulates a daily punishment of up to Rs. 100 for noncompliance. Persistent failure may lead to imprisonment for up to 3 months or a fine up to Rs. 1,000, or both, as stipulated in Section 29(5). This assures that landlords maintain essential services for tenants.

Inspection of premises by the landlord- Section 29 of the MRCA, allows the landlord to inspect the premises rented or given on license at a reasonable time and after giving prior notice to the tenant.

Eviction of tenants under the MRCA

If the court decides that the tenant has seriously violated the terms of the rental agreement or violated the terms of the lease, the landlord may be able to retake control of the rental property.

Landlords can reclaim possession if,

• The tenant violates Section 108 of the TOPA (Transfer of Property).
• The tenant constructs a permanent structure without the landlord's knowledge.
• The tenant has given notice for vacation and the landlord sells or re-rents the premises.
• The tenant annoys or uses the premises for illegal activities.
• The tenant engages in unauthorized subletting of the premises
• The tenant is no longer employed by the landlord.
• If the tenant fails to vacate within 30 days of an eviction notice, legal authorities can remove them.

Dispute Resolution

Rent-related issues are under the jurisdiction of the Court of Small Causes, Mumbai, and the Court of the Civil Judge. According to Section 38(a), these matters must preferably be resolved within a year after the summon date. Section 38(b) of the Rules stipulates that challenges must be resolved within 6 months of the respondent obtaining notice of the appeal.

Model Tenancy Act of 2020

On June 2, 2021, the Union Cabinet approved the Draft Model Tenancy Act (MTA) of 2020 to standardize the rental housing market and encourage private investment to manage housing shortages. The MTA strives to improve transparency, accountability, and balance between landlords and tenants. It will be circulated to States and Union Territories for adoption through new or amended legislation, targeting existing rental sector loopholes.

Significant features of MTA

• MTA will be implemented in upcoming years. Tenants who already exist can continue as per law.
• It includes both residential and non-residential properties throughout the state.
• It is important to execute a Written Tenancy Agreement (WTA) for both residential and non-residential properties.
• Any renting out, transfer, or assignment of rights under the WTA demands a supplemental agreement, and the Rent Authorities must be informed of such a move.
• The WTA provisions will govern any rent and any alterations
• When the lease expires or is terminated, failing to release the property will result in higher rent being due.
• A landlord's security deposit must not exceed more than 2 months' worth of rent for residential property or more than 6 months' worth of rent for non-residential property.
• After deducting all necessary expenses, the tenant will receive their security deposit returned when they vacate the property.
• Unless agreed upon in writing by the landlord and tenant, a tenant cannot be evicted during the term of the WTA.
• When the landlord or the tenant passes away, the WTA will continue to apply to their heirs and descendants with the same conditions for the remaining term of the lease.
• Both the landlord and the tenant are responsible for the care and repair of the property as specified in the WTA or in the manner found in the Second Schedule.
• If there is an emergency after the term expires, the tenant will be able to stay in the property for one month following the end of such event.
• The MTA will set up Rent Authorities, Rent Courts, and Rent Tribunals to develop a quick-fix quasi-judicial dispute resolution process.
• The Rent Court cannot decide on matters of title or ownership.
• The Rent Court can give eviction orders and recovery of possession based on specified reasons proposed by the landlord.
• Rent Courts and Rent Tribunals will follow regulations of natural justice and regulate their procedures.
• Civil courts cannot manage claims or proceedings related to the MTA’s provisions.

Conclusion

Rent and maintenance conflicts between building tenants and their landlords are an ongoing issue. While renters say that landlords should still maintain homes, landlords claim that cheap rents render upkeep unaffordable and costly. Since neither side is taking any action, this impasse has resulted in significant organizational damage.

So, to maintain the criteria of rent in Maharashtra, the government has enforced the Maharashtra Rent Control Act 1999. This act aims to protect and ensure it benefits both tenants and landlords. In case the rules are not followed, then both tenants and the landlords must have to pay the penalty.

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