Small print of rental deals
| Ever wondered why rental agreements are made out for 11 months? And if
there is any other legal option in working out an arrangement between
the landlord and the tenant? |
RENTAL OPTIONS: Know the requirements when you enter into a rental agreement.
Moving from one house to another frequently is a taxing job.
Add to it the problem of finding the right house for rent and settling down in a
new locality, and you have a virtual nightmare on your hands. Making use of
mover-and-packer services can help, but shifting nevertheless is rarely
pain-free.
That being the case, the situation definitely becomes
precarious only if a house is available on rent for 11 months, which is a common
situation that is encountered these days. Some landlords are generous enough to
let their tenants stay for several years; but others fear the tenants will
refuse to move out even when the need arises.
Minny George, who has given her house on rent in Kochi, says,
"I primarily wish to see my tenants happy in my house and they should also
maintain the building well."
What does the law say about the agreement between the
landlord and the tenant?
In Kerala, the leasing of buildings, houses and rooms is
regulated by the Kerala Buildings (Lease and Rent Control) Act, 1965. This
statute was introduced with an objective of regulating the leasing of buildings,
checking unreasonable eviction and controlling the rent of such buildings.
"The agreement executed by the tenant and handed over to
the landlord, evidencing the lease is called a `rent chit' or `rent agreement.'
This has to be executed on non-judicial stamp paper of prescribed value. All the
undertakings, restrictions, terms and conditions of the lease will normally find
place in a rent agreement," says Ranjith Xavier Attokaran, advocate.
Awareness of the law will to a great extent prove helpful to
both the landlord and the tenant.
So, what makes the rent control Act favourable to tenants,
but supporting to landlords too? According to the Act, despite any specific
duration for rental arrangement specifically mentioned in the rent agreement,
the tenant can continue his possession of the building, room or house. "A
landlord cannot forcefully evict his tenant without an order of eviction from
the rent control court appointed under the rent control Act," Mr. Attokaran
says.
The civil courts have no jurisdiction over the matter except
under limited circumstances.
Registration
Registration is an unavoidable factor in the rental process,
which brings us to the 11-month conundrum. "Clause (d) of sub-section (1)
of Section 17 of the Registration Act, 1908 prescribes that all leases of
immovable property from year to year, or for any term exceeding one year,
reserving a yearly rent, needs to be registered compulsorily," Mr.
Attokaran says. So herein lies the reason why landlords prefer to write
agreement for less than a year. It helps them stay away from the registration
requirement.
Writing an 11-month agreement also makes it easier for the
landlord to increase the rent.
"Often, the landlords ask for an increase of Rs. 500
every 11 months," says Aravind S., Kochi-based management consultant.
A section of the tenants offers a hike in the rent even
before the landlords demand it.
This seems to help in maintaining better relationships with
the landlords and earn their trust.
As most landlords and tenants admit, often the deed is
executed on a Rs. 50 stamp paper instead of determining the correct value
required, depending on the stamp duty.
"An agreement stands valid only when it is done on a
stamp paper of right value," Mr. Attokaran says.
Licensing
For those landlords who dread the possibility of being
compelled to evict tenants, the option of licensing is open.
Licences are controlled by the Indian Easements Act, 1882,
and Section 52 of this Act defines a licence.
According to this rule, the licensor (landlord) permits the
licensee (tenant) to do something on his premises. The tenant pays a licence fee
and a deed known as licence deed is made. Here, landlords are at a better
advantage.
Tenants have little say and they are to leave the place once
the landlord makes the demand that the tenants move out.
"But the courts can always explore deeper the
arrangement and find whether such license is in reality a lease, despite being
named a licence.
If the court finds it is a lease, the licensor will come to
the position of a landlord and in order to obtain eviction, have to seek
eviction under any of the grounds mentioned under Section 11 of the rent control
Act," Mr. Attokaran adds.
Opting for a rental or licensing arrangement depends on the
personal choices of landlords and tenants.
* * *
Grounds for eviction
The main grounds under which a landlord can seek eviction
under Section 11 of the Act are as follows:
When rent is kept in arrears and is not paid despite a
specific demand from the landlord.
When the landlord or any family member dependent on him, in
good faith needs the building, house or room for his or her own occupation.
When the building, house or room is sublet to some other
person without permission from the landlord and such an arrangement is not put
to an end despite a demand from the landlord.
If the building, house or room is in such a dilapidated
condition that it needs to be reconstructed.
If without any reasonable cause, the building, house or room
is left vacant without occupation for a period of six months continuously.
Thus, once the tenant is given possession of the building,
house or room, to get him evicted, the landlord has to approach the rent control
court and seek eviction under any of the above-mentioned grounds, Mr. Attokaran
says.
RESMI JAIMON
Courtesy: Property Plus, The Hindu
http://www.hindu.com/pp/2007/04/14/stories/2007041400540300.htm
