Sunday, August 13, 2006
Rent woes plague owners, tenants
Mr Ram was asked to pay a monthly rent of Rs 10,000 for a two-room portion of a building because it is located near a very popular coaching centre. Can Mr Ram complain to any one to ensure that the rent is fixed at a reasonable rate?
Mr Krishna has rented out a building with a 1000 square yard room in the heart of the city. The tenant is paying just Rs 250 per month since twenty years. Should Krishna forget about hiking the rent or is any option available to him?
The tenants feel that the rent is too high, while the landlords crib that the amount they receive is not sufficient and proportionate to the investments made.
A tenant has a right to pay only a fair rent and similarly a landlord has right to receive ‘fair rent’.
Fair rent and the law
Fair rent is the expression used in Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960. The aim of this legislation is to see that rent is fairly fixed and no exploitation takes place in the name of ‘rent’. This legislation is intended to protect the interests of both the landlord and tenants. According to section 4, the Controller has the authority to determine the fair rent. The section reads as follows:
Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960, Section 4. Determination of fair rent:
(1) The Controller shall, on application by the tenant or landlord of a building, fix the fair rent for such building after holding such enquiry as the Controller thinks fit.
(2) In fixing the fair rent under this section, the Controller shall have due regard:
a) to the prevailing rates of rent in the locality for the same or similar accommodation in similar circumstances during the twelve months prior to the April 5, 1944
b) to the rental value as entered in the property tax assessment book of the concerned local authority relating to the period mention in clause (a)
c) to the circumstances of the case, including any amount paid by the tenant by way of premium in addition to rent after the 5th April, 1944.
(3) In fixing the fair rent of residential buildings, the controller may allow:
(i) if the rate of rent or rental value preferred to in subsection (2) does not exceed twenty-five rupees per mensem, an increase not exceeding 12.5 per cent, on such rate or rental value.
(ii) if the rate of rent or rental value exceeds Rs 25 per mensem, but does not exceed Rs 50 per mensem, an increase not exceeding 18.75 per cent on such rate or rental value.
(iii) if the rate of rent value exceeds Rs 50 per mensem, an increase not exceeding 37.5 per cent on such rate or rental value.
Provided that in the case of a residential building, which has been constructed after April 5, 1944, the percentage of increase shall not exceed 37.5, 56.25, 75.
(4) In fixing the fair rent of a non-residential building, the Controller may allow:
(i) If the rate of rent referred to in sub-section (2) does not exceed Rs 50 per mensem, an increase not exceeding 56.25 per cent, on such rate.
(ii) If the rate of rent value exceeds Rs 50 per mensem, an increase not exceeding 75 per cent.
