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What is Rent Control Act?

Rent Control Act was an attempt by the Government of India to eliminate the exploitation of tenants by landlords. Rent legislation tends to providing payment of fair rent to landlords and protection of tenants against eviction. But the allowances have been very generous and hence tenants residing in rental properties in India since 1947 continue to pay rents fixed then, irrespective of inflation and the realty boom.

The Rent Control Act has led to several adverse situations like languishing investment in rental housing, withdrawing of existing housing stock from the rental market, stagnating municipal property tax revenue. The rent control along with security of tenure has not given any encouragement to house owners to renovation their houses and most houses as a result have a worn out look.

Repeal of the Rent Control Act would lead to construction boom and meet the growing need for housing and aid employment generation. There will be more rational use of prime locations and will set off a continuous process of urban renewal.

In 1992, the Central Government proposed a model rent control legislation, which was meant for and circulated to all states. The model Act proposed modification of some of the existing provisions on inheritance of tenancy and also prescribed a rent level beyond which rent control could not apply. The New Delhi Rent Control Act that was passed in 1997 was based on this but failed to be notified due to resistance from traders who are sitting tenants. Very few states have introduced the model Act.

The new Maharashtra Rent Control Act, Delhi Rent Control Act, Tamil Nadu Rent Control Act, Karnataka Rent Control Act all has provisions for the dispute among the landlords and tenants. Each of the State Rent Act provides for fixation of Standard Rent as well decree for possession and provisions that lay down the satisfaction of the Court.

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Rental Agreement Format in India

Rental Agreement is a legal document, which settles down the rules and regulations to follow by both the landowner and tenant party. It is very important for both the parties, as it contains essential business details. If any of the point is not observed by any of the parties, the opponent can apply for a lawsuit for violating the legal system. Irrespective of the size of the lease document, it should cover the most important aspects to strengthen the landowner and tenant relationship. Rental Agreements in India could be vary from state to state but here are a few important guidelines that are followed through out the country.

Here is a list of items which you should include in your lease agreement:

1. The full and legal name of the tenant should be present in Indian rental agreements. One or more people can be the part of the lease and all of them are equally responsible for all terms and conditions of leasing. For example, if you are group of guys and girls and want to rent an apartment, everyone living in the property should add their name to the rental agreement. However, if you are sharing the house with just your family, not everyone living in the property is required to be listed on the agreement. Only the head of the family will be sufficient.

2. Your rental agreement must depict the term or period of lease. A normal agreement in India is normally for 11 months. It will depend on your plan for how long the property is going to be rented. If you want the rental agreement longer than 11 months, then you have to get the agreement registered with the government, which is a hassle.

3. All rental agreements in India must specify the amount of rent, due date and the way of payment. It is better to clarify the details like suitable payment methods as cash, personal checks, online bank transfer or if there is any penalty for not paying rent within the due date or any fine for bounced checks etc. If it is not specified in the agreement, you can not penalize tenant out of your own.

4. Security Deposits in India varies from state to state and in fact, sometimes from person to person in the same city. To keep things clear, kindly specify in the rental agreement the amount of security deposit, how you are going to use the deposit like for repairing works or something else. Also mention that the tenant can never use the money for paying the rent. If you accept any legal non refundable fee for cleaning or pets, mention that too clearly. The rental agreement must state how and when the deposit is going to be returned, with or without interest and in which condition the deduction will be applicable.

5. Given the tropical climate of the country, the maintenance of the properties in India is slightly high. The agreement must clearly specify the responsibility for repairing and maintenance for you and your tenant. It must be mentioned that the tenant is fully responsible for any kind of damages caused by his negligence.

6. If you are very particular about your personal space and would like to live a non-intruding lifestyle, it is better to clarify the legal right of the landlord to enter into the premises, by specifying the number of days notice will be given in advance for accessing your property.

7. You should explicitly mention in the rental agreement that the tenant should not be involved in any illegal activities within your premises.

8. Also, the tenant should not indulge in any unruly behavior which could disturb the neighborhood like excessive noise etc.

9. Mention in your agreement whether or not you allow pets with the tenants. In case you allow pets, then specify any restrictions for pets which you want to apply, like the number of pets or type of pets etc.

10. In India, some people tend to religious and don’t like non-vegetarian food to be cooked in their property. It is a good idea to mention this in the agreement what kind of food will be allowed in the property.

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