The Maharashtra Rent Control Act 1999 - An

Analysis
The Maharashtra Rent Control Bill 1999
passed with amendments by both the
Legislative Assembly and Legislative Council,
aimed to unify the three different Rent
Control Laws, in operation in the State of
Maharashtra. The new Act called the
Maharashtra Rent Control Act 1999 brought
about several changes in the Bombay Rent
Control Act.
This Act does not apply to any premises belonging to the Government or a
local authority, any premises let or sub-let to banks, or any Public Sector
Undertakings or any Corporation established by or under any Central or
State Act.
Landlords perspective
Ownership confers both rights and obligations upon the holder. The
Maharashtra Rent Control Bill 1999 has clearly spelt out the duties as well
privileges of the landlord.
Fixing and increasing rent
It is the landlords prerogative to fix the rent and increase it at the rate of
four per cent per annum from the date of the commencement of the Act. He
can also increase the rent at the rate of 15 per cent per annum for
improvements and alterations provided 70 per cent tenants consent in
writing. The landlord can also increase rent at 25 per cent per annum for
special or structural repairs, exclusive of any repairs carried out under the
Maharashtra Housing & Area Development Authority (MHADA) Act. He can
also increase rent due to any increase in taxes.
Duty to keep premises in good repair
According to the Act, every landlord shall be bound to keep the premises in
good and tenantable repair. If he neglects to make any repairs, within a
reasonable time after a notice of fifteen days is served upon him by post or
in any other manner by a tenant or jointly by tenants interested in such
repairs, such tenant or tenants may themselves make the same and deduct
the expenses of such repairs from the rent or otherwise recover them from
the landlord. Provided further that, the amount so deducted or recoverable in

any year shall not exceed one-fourth of the rent payable by the tenant for
that year.
Conditions of Eviction
Section 16 (1) (I) of the Act provides that the landlord may recover
possession subject to the provisions of section 25. Section 25 states that a
landlord shall be entitled to recover possession of any premises if the court is
satisfied that the premises are reasonably and required bona fide by the
landlord.
The landlord can also recover possession of the premises if the tenant has,
without the landlords consent given in writing, erected on the premises any
permanent structure. Also if the tenant, his agent, servant, persons inducted
by tenant or claiming under the tenant or, any person residing with the
tenant has been guilty of conduct which is a nuisance or annoyance to the
adjoining or neighboring occupier, or has been convicted of using the
premises or allowing the premises to be used for immoral or illegal purposes.
Rules related to rebuilding premises
The landlord, however, will have to give certain undertakings as mentioned
in sub-section 6. These are:
He/she must have sufficient funds to carry out the work.
The plans of the proposed buildings be prepared and approved by the
municipal authorities prior to tendering the request for vacation.
The number of residential tenements in the new building should not less
than the number of residential tenements in the old building.
The carpet area of different premises let in the old building must be the
same as in the new building.
The landlord gives an undertaking that the carpet area of different
premises let in the new building will be the same as was let in the old
building; the premises in the new building will be offered to the tenants of
the old building;
The work of demolition of the old building will be completed within three
months and the new building will be completed in 15 months thereafter.
However, under the Maharashtra Rent Control Act 1999 the requirement of
prior procurement of a tribunal certificate has been dispensed with and the
responsibility now rests with the court to ensure that the tenants will neither
be unnecessarily harassed nor evicted.
Leave & License Agreement
Section 55 of the Maharashtra Rent Control Act, 1999, provides that any
agreement for leave and license or letting of any premises, entered into
between the landlord and the tenant or the licensee, as the case may be,
after the commencement of this Act, shall be in writing and shall be

registered under the Registration Act, 1908. The responsibility of getting

such agreement registered shall be on the landlord and in the absence of the
written registered agreement, the contention of the tenant about the terms
and conditions subject to which a premises have been given to him by the
landlord on leave and license or have been let to him, shall prevail, unless
proved otherwise. Any landlord who contravenes the provisions of this
section shall, on conviction, be punished with imprisonment which may
extend to three months or with fine not exceeding rupees five thousand or
with both.
Under Section 55(1) it is clear that only the agreement of tenancy or leave
and license executed between the landlord and tenant or the landlord and
the licensee is required registration.
Tenants perspective
A tenant is a protected person under the Maharashtra Rent Control Act, 1999
and is often aptly referred to as a statutory tenant. A statutory tenant pays a
nominal rent. Upon his death, any relative residing with him at the time of
his demise steps into the formers shoes by law. Only the state of
Maharashtra has provisions for mass letting in its Rent Control Act.
Pagdi system legalised
In case of redevelopment of old properties in Mumbai, theres reference to
pagdi properties. The consideration paid to a landlord as a fine, premium or
consideration known as pagdi has been legalised by Section 56 of Rent
Control Act, 1999.
It is now also lawful for a tenant to receive any amount in consideration of
the relinquishment or transfer of his tenancy. Incidentally, in the Rent Act,
1974 giving or receiving pagdi in cash was held illegal hence there was
extensive use of black money. Now too, in cities like Mumbai, for the transfer
of tenancy, 33 per cent of the amount in transaction is paid in cash to the
landlord to effect the transfer of tenancy or assignment.
However, when there is redevelopment of the said property, the landlord
usually makes a deal with the developer and stakes his claim of his 33 per
cent and accordingly takes profit out of the property permanently. Those
who are in accommodation or in possession of the said property after
redevelopment become the sole owners of the said premises.
Protection against eviction
According to the Act the landlord shall not be entitled to the recovery of
possession of any premises so long as the tenant pays, or is ready and
willing to pay, the amount of the, standard rent and permitted increases, if

any, and observes and performs the other, conditions of the tenancy, in so
far as they are consistent with the provisions.
The landlord cannot file any suit against the tenant on the ground of nonpayment of the standard rent or permitted increases due, until the expiration
of ninety days next after notice in writing of the demand of the standard rent
or permitted increases has been served upon the tenant.
No decree for eviction shall be passed by the court in any suit for recovery of
possession on the ground of arrears of standard rent and permitted
increases if, within a period of ninety days from the date of service of the
summons of the suit, the tenant pays or tenders in court the standard rent
and permitted increases then due together with simple interest on the
amount of arrears at fifteen per cent per annum.
Protest against new proposals
The Model Residential Tenancy Act, 2011, drafted by the Union ministry of
housing proposes to replace archaic rent control legislations that cap rentals.
Rent control is a state subject and the draft legislation is yet to be adopted
by states. But once in place, the law will ensure that tenants hitherto paying
a pittance as rent for properties in prime localities will have to pay according
to the market rate.
Tenant associations in the state have condemned a proposed legislation
drafted by the Centre that will bring paltry old rentals on par with market
rates. The groups claim that the move does not allow for Mumbais unique
rental system and might leave lakhs of Mumbaikars homeless.
Prepared by the Union housing ministry, the draft Model Residential
Tenancy Act, 2011, intends to replace antiquated rent control legislations
that cap rents. These legislations have, over the years, resulted in landlords
getting only a pittance for their prime properties in metros.
The draft legislation proposes that the rent for all new tenancies be based on
an agreement between the landlord and the tenant. And in cases where the
rent was finalized years ago, a freeze be levied on revision for 24 months. In
the 22nd month, however, the landlord can seek a revision. And, if there is
no agreement, the landlord can terminate the tenancy.
Conclusion
Tenant associations claim that the new law would spell disaster for Mumbai,
where thousands of old properties are still rented out under the longstanding pagdi system. Under this practice, the tenant pays a big nonrefundable lump sum at market rate at the beginning with the understanding
that the landlord will charge only a minimal rent. If the new law goes through,

these tenants will have to pay rents at nearer to market rates. However,
landlords have welcomed the legislation and the government hopes that the
new system will encourage landlords to reinvest in their properties.

Source: CommonFloor.com
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