Maharashtra Rent Control Act: A Guide for Landlords and Tenants

The Maharashtra Rent Control Act, 1999, governs rental agreements for residential properties in Maharashtra. It aims to balance the rights of landlords and tenants, ensuring fair rent and security of tenure for tenants while encouraging new housing construction. This article provides a detailed overview of the Act, covering key aspects such as rent hikes, eviction, and dispute resolution.

What is the Maharashtra Rent Control Act, 1999?

The Maharashtra Rent Control Act, 1999, replaced three previous rent control acts in Maharashtra:

• The Bombay Rents, Hotel and Lodging House Rates Control Act, 1947

• The Hyderabad Houses (Rent, Eviction and Lease) Control Act, 1954

• The Central Provinces and Berar Regulation of Letting of Accommodation Act, 1946

The Act aims to unify and consolidate rental housing laws in the state. It seeks to protect tenants from arbitrary rent increases and eviction while also encouraging the construction of new houses by assuring landlords a fair return on their investment.

Who is a Landlord and a Tenant under the Act?

• Landlord: The owner of the property who leases it to a tenant.

• Tenant: Any person who pays rent for the premises they occupy. This includes:

  • A deemed tenant

  • A sub-tenant

  • A person who has derived title under a tenant

  • A person to whom interest in the premises has been assigned or transferred

Rent Control Provisions

Standard Rent and Permissible Increases

The Act allows landlords to increase the rent by 4% per annum. In addition, the rent can be increased for the following reasons:

• Improvements and Modifications: If the landlord makes improvements or modifications to the property with the written consent of 70% of the tenants, the rent can be increased by 15% per annum.

• Structural Repairs: For structural repairs carried out under the Maharashtra Housing and Area Development Authority (MHADA) Act, the rent can be increased by an additional 25% per annum.

• Increase in Taxes: If the property taxes are increased, the landlord can increase the rent proportionally, but not exceeding the amount of the tax increase.

Rent Agreement Registration

It is mandatory for landlords and tenants to register their rent agreement under the Registration Act, 1908. The responsibility for registration lies with the landlord. Failure to register the agreement can result in imprisonment for up to three months or a fine of up to ₹5,000, or both.

Rent Receipts

Landlords must provide rent receipts to their tenants. Failure to do so can result in a fine of ₹100 per day of default. Rent receipts are essential for tenants to claim tax deductions on the House Rent Allowance (HRA) component of their salary.

Restrictions on Property Usage

Landlords cannot use residential properties for commercial purposes, nor can they allow their tenants to do so. Violation of this rule can lead to imprisonment for up to six months or a fine of up to ₹10,000, or both.

Eviction of Tenants

The Act provides security of tenure to tenants. A landlord cannot evict a tenant as long as they pay rent and adhere to the terms of the agreement. However, a landlord can seek eviction under specific circumstances, including:

• Non-payment of rent (after following due process)

• Damage to the property

• Nuisance or annoyance to neighbors

• Illegal or immoral activities on the premises

• Unlawful subletting

• The landlord requires the premises for their own use (subject to certain conditions)

Repairs and Reconstruction

The landlord is responsible for maintaining the property in good condition. If the landlord fails to carry out necessary repairs, the tenant can do so and deduct the expenses from the rent. Landlords who wish to undertake reconstruction must meet certain conditions, such as:

• Having sufficient funds to complete the reconstruction

• Obtaining necessary approvals from local authorities

• Ensuring the number of units and carpet area in the new building are not less than in the old building

Dispute Resolution

Disputes between landlords and tenants are typically handled by the Court of Small Causes or the court of the Civil Judge. The Act mandates that these courts should dispose of such cases within 12 months from the date of service of summons.

Impact of the Model Tenancy Act

The central government's Model Tenancy Act (MTA), approved in 2021, aims to create a more balanced rental housing market across India. While states are not legally bound to adopt the MTA, it may influence amendments to existing state laws like the Maharashtra Rent Control Act. There are concerns that adopting provisions from the MTA could lead to significant rent increases and easier eviction of tenants in Maharashtra, particularly those living in older, rent-controlled properties.

Conclusion

The Maharashtra Rent Control Act, 1999, provides a framework for regulating rental housing in the state.

It is crucial for both landlords and tenants to understand their rights and responsibilities under the Act. While the Act favors tenants in many aspects, it also provides landlords with legal recourse for rent increases and eviction under specific circumstances. As the rental housing market evolves, it remains to be seen how the Act will be amended to address contemporary challenges and ensure a fair and equitable environment for all stakeholders.

FAQs

Q: What is the maximum rent increase allowed under the Act?

A: Landlords can increase the rent by 4% per annum. Additional increases are allowed for property improvements (up to 15% per annum), structural repairs (up to 25% per annum), and increases in property taxes.

Q: Is it mandatory to register a rent agreement in Maharashtra?

A: Yes, it is mandatory to register any rent agreement under the Registration Act, 1908. The landlord is responsible for registering the agreement.

Q: Can a landlord evict a tenant for not agreeing to a rent increase?

A: No, a landlord cannot evict a tenant solely for refusing a rent increase. Eviction is only allowed under specific circumstances mentioned in the Act, such as non-payment of rent, damage to the property, or nuisance to neighbors.

Q: What are the tenant's responsibilities regarding property maintenance?

A: Tenants are responsible for keeping the premises clean and preventing damage. They should also inform the landlord of any necessary repairs.

Q: Can a landlord cut off essential services like water and electricity?

A: No, landlords cannot cut off essential services to tenants. Doing so is a punishable offense.

Q: What can a tenant do if the landlord refuses to make necessary repairs?

A: If the landlord fails to make necessary repairs after a 15-day notice, the tenant can carry out the repairs and deduct the expenses from the rent.

Q: Can a landlord enter the rented premises whenever they want?

A: No, landlords can only inspect the premises at a reasonable time after giving prior notice to the tenant.