Indian Real Estate

Very few people are aware of the fact that certain properties, especially those owned by the government, are not covered by the Rent Control Act (RCA). This Act was introduced with the aim to protect the rights of middle-class tenants and owners of small houses. Therefore, it cannot be extended to resolve the disputes pertaining to skyscrapers, multi-storied building owners and huge apartments that reap several thousands of rupees. It is not applicable to “able tenants” (residents with sound financial background) who can pay high rents, and tenants of government lands and buildings.

The RCA takes care of the interests of the tenants and the landlord and provides enough authority to the rent controller to control certain buildings under private ownership. But the law has its limitations. This law does not protect the rights of rich landlords and tenants who have to seek recourse to ordinary civil courts for justice if there is any breach of contract or lease. The RCA provides major reliefs on nominal payment of court fee. Whereas under the Transfer of Property Act, which governs the position of leases, the parties seeking justice have to pay court fee in proportion to the value of the justice they ask for.

Rich Buildings Excluded

Buildings that can fetch a rent of more than Rs 3,500 in municipal corporation areas like Hyderabad, Visakhapatnam, Vijayawada, Guntur, Warangal, etc., and the municipal council buildings which fetch more than Rs 2,000 as rent in other municipal areas are excluded from this law. The rent controller or courts constituted to resolve rent control disputes will not hear the tenant from a municipal corporation area, who is paying more than Rs 3,500, and a tenant from a municipal council building, who is paying Rs 2,000. They cannot file rent control petitions in the courts. This has been stated clearly in Section 32 (c).

Government Buildings out of Rent Control

According to Section 32, the Rent Control Act [AP Buildings (Lease, Rent and Eviction) Control Act, 1960] will not apply to State and Central government buildings, buildings within the Cantonment Board limits or any local authority. This Act will not apply to buildings constructed or substantially renovated, either before or after the commencement of the Act of 1960, for a period of 15 years from the date of completion of such construction or substantial renovation.

Substantial Renovation

A building may be said to be substantially renovated if, not less than 75 per cent of it is built in accordance with the criteria prescribed for determining the extent of renovation (Explanation I to Section 32).

Date of completion

The date of completion is crucial to decide the applicability of the Act. The date of completion is considered to be the date of completion as intimated to the concerned authority or of assessment of property tax, whichever is earlier. If the premises has been constructed in stages the date on which the initial building was completed and an intimation thereof was sent to the concerned authority or was assessed to property tax, whichever is earlier, (Explanation II to Section 32) is taken into account).