Query on rent increase for residential property

This query is : Resolved 

12 May 2016


I am a tenant in a residential apartment in Bangalore. I moved into the apartment in March 2014. I am quoting a clause from the contract, "After every 11 months, the tenant has to pay 5% increase on the rent to the owner and shall renew the agreement on mutual acceptance by both parties."

The owner did not renew the contract in 26 months and sent no official intimation for increasing the rent. Now, after 26 months he is asking for arrears. He says that it is my responsibility to pay the revised rent, even if the owner does not mention. He is stating that under the above mentioned clause I should have automatically calculated the revision and paid.

I want to know if it is the tenant's responsibility to renew the contract after 11 months. Also, if it was not renewed, is the tenant liable to pay arrears?

RAJU O.F., (Expert)
13 May 2016

As per a gentleman's contract, as a tenant, you had to renew the contract to legally continue in the same premises. Better settle the matter amicably by payment of arrears of increased rent, which you had agreed initially. Or else the owner can initiate legal proceedings for overstaying beyond contract period, for arrears of rent and also to vacate you from the premises.

Rajendra K Goyal (Expert)
13 May 2016

Have you been paying the rent regularly, if yes, how in cash or through Banking channel?

Has the landlord been issuing the receipt of rent paid regularly, if yes, have you preserved all?

If so the claim of landlord has less merits.

Discuss with local lawyer and show him all related documents.

Maharshi Ray (Querist)
13 May 2016

I have been paying rent regularly, on time. The landlord acknowledges that. I transfer the rent amount to the owner's account through internet banking.

No. The landlord has never issued rent receipts. But he acknowledges that he receives the rent amount in his account.

Rajendra K Goyal (Expert)
13 May 2016

In absence of rent receipt, land lord may have a plea that he never agreed to forgo claim of increased rent as per original agreement.

Landlord has right to claim arrears of rent.

RAVI K GOUD (Expert)
14 May 2016

How does the landlord acknowledge the receipt of rent i.e., orally or in writing.

If it is in written then you can claim it as receipt of the rent without any protest or objection.

But morally as per the agreement even when it is not physically renewed, when your tenancy is continued without any obstacle it is deemed that your agreement is renewed with the agreed terms (Law of Estopel comes into picture), So you are liable for the payment of enhanced rent though he has accepted the old rent.

Hence it is wise to pay the rent arrears if you want to continue with the same premises. if it is not possible to pay arrears at a time, then request him to pay in installments.

T. Kalaiselvan, Advocate (Expert)
14 May 2016

If you start taking up all these issues legally there will be no end to any problem.
This a fault on both the sides, as a matter of fact you cannot continue the tenancy after 11 months as per the agreement and you never bothered to renew the same till this date, hence as a gentleman agreement, you may calculate the arrears and pay a negotiated amount on the amount so arrived, if he agrees to it. Sit and talk to him to clear the problem from both the sides, do not stretch the issue on good for nothing issues.

V R SHROFF (Expert)
29 November 2017

You willingly agreed to pay 5% per year increase.
It is reasonable and justified, looking at inflation rate.

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