How to solve the tenant issue - pagadi system

Sir,

Your property is governed by the Maharashtra Rent Control Act 1999, under which you can not increase the rent arbitrarily, however as per the order of the Supreme Court of India, the rent can be increased by 5% every year for 5 years.

In case of heavy repairs to the building, the landlord can collect the entire cost of the repairs from the tenants, in a phased manner after taking due legal permission.

If the tenants carry out the heavy repairs, then they can collect the cost of the repairs from the landlord by deducting the amount, being not more than 50% of the rent,  from the monthly rent bills.

The entire property tax, related to the space rented out to them, has to be borne by the tenants, if not agreed to the contrary.

The replies to your queries:

[1] Issue a notice to all the tenants of the chawl, seperately to each of them, per registered post a/d, stating the dilapidated condition of the chawl and inform them thay they are residing there at their own risk, and that the landlord will not be responsible for any damage to their property or self.

[2] The reponsibility of the repairs is with the landlord and he has to discuss it with the tenants for a solution.

[3] The basic rent is the rent that you have been collecting, plus the proportional Municipal and other Taxes and water and electricity charges, as previously agreed upon.

[4] Legal notices have to be issued for collection of past dues, and subsequently  the Court has to be aproached.

Kishor MEhta

Dear Mr. Kishor Mehta,

As per your below mentioned reply,

however as per the order of the Supreme Court of India, the rent can be increased by 5% every year for 5 years.

Please give us the order of supreme court. 

Madam,

Unfortunately  I do not have a referrence of  the Supreme Court order, however I cite hereunder the relevant section of the Maharashtra Rent Control Act 1999, on which the order was based, which will be helpful.

"Maharashtra Rent Control Act, 1999

11. Increase in rent annually and on account of improvement, etc. special addition etc. and special or heavy repairs.

(1) After the commencement of this Act a landlord shall be entitled to make an increase of 4 per cent per annum in the rent of the premises let for any of the purposes referred to in sub-section (1) of section 2.

Explanation.-For the purposes of this sub-section, the period of one year on completion of which rent shall be so increased shall be computed from the date of commencement of this Act."

Regards,

Kishor Mehta

Under section 11 of MRC act 1999, a landlord can increase rent by 4% every year.  Now my query is

1. 4% on standard rent or permissible rent

2. 4% on basic rent or accumulated rent i.e. 100+4%=104 then 104+4%=etc. or Rs.4 every year

The annual increase of 4% in rent is leviable on standard rent at a simple rate: i.e. for a rent of Rs.100 the annual increase shall be @ flat Rs. 4/- yearly.

Regards,

Kishor Mehta

If you go through the extracts of S11 of MRC act 1999 given below

11. Increase in rent annually and on account of improvement, etc. special addition etc. and special or heavy repairs.

(1) After the commencement of this Act a landlord shall be entitled to make an increase of 4 per cent per annum in the rent of the premises let for any of the purposes referred to in sub-section (1) of section 2.

4% per cent is for only rent and nowhere the term 'standard' is mentioned.

Further S8 says court may fix standard rent upon application as per extract given below

8. Court may fix standard rent and permitted Increases In certain cases.

(1) Subject to the provisions of section 9 in any of the following cases, the court may, upon an application made to it for the purpose, or in any suit or proceedings, fix the standard rent at such amount as, having regard to the provisions of this Act and the circumstances of the case, the court deems just,-

It means the landlord will have to apply the court to fix standard rent.

Further S9 says like this,

9. No applications for standard rent In certain circumstances.

No court shall, upon an application or in any suit or proceeding, fix the standard rent of any premises under section 8, or entertain any plea that the rent or increases are excessive, if the standard rent or the permitted

The tenant would take shelter of the above section because following section10 says like this

10. Rent in excess of standard rent illegal.

(1) Save as otherwise provided in section 6, it shall not be lawful to claim or receive on account of rent, for any premises any increases above the standard rent and the permitted increases, unless the landlord was, before the coming into operation of this Act, entitled to recover such increase by virtue of, or under, the provisions of any of the repealed Acts or is entitled to recover such increase under the provisions of this Act;

(2) Any contravention of provisions of sub-section (1) shall be an offence punishable, on conviction, with imprisonment not exceeding three months or fine not exceeding rupees five thousand or with both.

It was in this respect that the Hon. Supreme Court had adjudged an increment of 5% per annum, in the standard rent, for a maximum period of 5 years in the rents of tenanted premises. Total increase should not go beyond 25% of the standard rent.

Unfortunately I do not have a referrence to the judgment on hand. I hope some informed expert will shade a light on this.

Regards,

Kishor Mehta

Most of the landlords are stuck in this dillema where to increase the rent and the court cases are going on.  You referred your supreme court 5% knowledge on the ground of dillema and therefore I asked about the same.  You please do not say anything about law unless you have detailed reference about the same.  Still you get any reference, you please inform me.