ronny sullivan (Accountant) 25 August 2012

Mumbai rent

I have a question regarding a property that has been let out originally by my grandparents to a government company in Mumbai. The property was intially let out in 1980s on a 3 year agreement after which it was extended. The rent price was never realy updated in line with market value of surrounding offices then and the rent paid remained constant until until 2007 when it was increased.

I have since looked into the rent payable by surrounding offices who are paying around 8x more than what we receive in rental income. I have been made aware that under the Maharashtra rent control act I do have the power to increase the rent in any given year by more than 4%. Is there any way of getting a fair rent out of this situation?

If this is not possible I would like to gain repossession of the property for personal use. What would be the best approach for this and what notice is required by law to be given to the tenant

Thanks

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8 Replies

Anish Thakur 7018812737 (advocate) 26 August 2012

respected querist,

you are right that owner had the power to increase the rent by 4% in any consecutive year for which the rent deed is made,second if you are not satisfied with the rent and need property for self use,you can file for eviction suit against the party.it will be best remedy available for you this time as you are saying that neighbourer offices are 8 times higher on rent so you cant reach to that extent in 1 year or even in 10 years as you can increase only 4 % hike in a year,resulting in huge loss for you.

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ronny sullivan (Accountant) 26 August 2012

Hi Anish

Hope you're well and thanks for your reply

I myself am not a resident of India so am not aware of how the rent laws operate. The lease agreement in this situation has expired and usually where Im from 2 weeks is sufficient as a notice to ask the tenant to leave but 2 months is customarily given. Are you aware of any such law in Mumbai protecting the tenant in this way? After all they have been a tenant for over 20 years. Are you aware of a written guide available anywhere of the process of notice and eviction

Thanks in advance

M V Gupta (Advocate) 28 August 2012

Dear Mr. Sullivan, As you are staying abroad, iyou will ahve to make out a strong case that you need the premises for your own business or profession or opening of a branch office of your own. Section 16 (g) provides for the right of Land Lord to ask for the premises if they are "reasonable and bonafide required by land lord for his own occupation". As regards increase in the rent, under Section 11 of the MRC Act, 1999 you can demand for 4% increase evcery year. Apart from this you are alsoentitled to demand 15% increase in the rent on account of any special additions or alterations made in the premises or additional amenities provided for the premsies etc under Section 16(4) of the ACt you can also demand increase in the rent on account of special structural repairs done to the premises. It is presumed that the contract is one of lease and not of license.

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ronny sullivan (Accountant) 03 September 2012

Thanks Mr Gupta. Recently read the MRC Act and i guess best course of action will be under s16 seen as s11 restricts rent increase beyond 4%. What is customary or required by law in terms of serving a notice for reposession and the time given for a tenant to vacate the property?

M V Gupta (Advocate) 06 September 2012

As yours is an old tenancy of more than 30 years better get the notice of possession given through your advocate who will draft the notice after taking inot account all relevaent facts. anothe alternative awailable to you is to file an application in the rent control court for fixation of fair rent for the premises. Later course of actionappears to be advisable.

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