Author: A. Rishi Kannan, 3rd year of BBALLB(Hons.), Sathyabama School of Law, Sathyabama University, Chennai
INTRODUCTION
Ever since the outbreak of the novel coronavirus, every sector had been hit extremely hard due to the nationwide lockdown imposed from March 21, 2020. The commercial real estate sector and the capital markets are not immune to these effects. With the world anticipating witnessing the aftermath of the pandemic, the landlords and tenants do wait for a hassle-free year as both of the parties are ridiculously hit by the restrictions which were in place during the past 8 months to contain the spread of the novel coronavirus. On one hand, many tenants lost their jobs and livelihood to the pandemic leading to non-payment of rent. On the other hand, landlords suffered problems like due EMIs, frequent pressure from their lenders seeking repayment of their dues.
WHAT IS TENANCY?
Tenancy refers to the act of letting a building, house, base or land for rent to persons who are in dire need of accommodation. Earlier, the concept of formulating rental agreements was confined only to leasing procedures, but now, it has been extended to tenancy also.
DELINQUENT TENANT
Delinquent Tenant refers to a tenant whose rent payment which is provided under the respective lease remains unpaid for more than 31 days after the original due date for the payment of such rent; Provided that, if the arrears of the payment as of any fixed date are still outstanding, which represents less than 25% of the monthly rent payment due by such tenant and if the entire amount of such delayed rent payment is subject to an agreed payment plan or government-related subsidy payment, such tenant will not be considered a delinquent tenant; Rent of a tenant which is paid by check and received on time by the landlord, when the tenant returns the check to the landlord due to lack of sufficient funds with his bank, he sometimes becomes criminal. Since the rent is so low, the landlord can now give 3 days’ notice to pay or leave.
GROUNDS TO EVICT A TENANT
As per the statutory instruments and laws relating to rent payment in India, the following grounds are set out to evict a tenant from their premises by filing an eviction suit in the local civil court under which the property/house/landfalls.
1. If the tenant had become delinquent, that is, the tenant had failed to pay the rent of the property for more than 31 days from the due date mutually agreed to in the rental agreement.
2. Subletting the rented house/land/property to another person without the consent of the landlord or the rightful owner.
3. Usage of the rented premises for unlawful or illegal activities or other activities not mentioned in the rental agreement.
4. If the landlord needs the rented property/land/house for his occupation or his beloved ones.
5. If the landlord needs the property for purposes of repairs and renovation which is impossible without the tenant vacating the premises.
6. If the landlord intends to construct another building which is possible only with the demolition of the rented property.
7. If the tenant had engaged in an act which leads to the damage of the property or diminution in the value of the property.
MEANS TO EVICT A TENANT
1. Eviction Notice: The landlord should file an eviction notice before the appropriate and competent court of jurisdiction seeking eviction of the tenant by mentioning reasonable grounds for eviction and the deadline to evict the tenant.
2. Eviction Suit: In cases when the tenant refuses to evict the rented premises even upon eviction notice served by the court, contesting the eviction, the landlord can hire and consult a rental property lawyer to file an eviction suit on the local civil court under which the property falls.
3. Final Eviction Notice: The court hears both sides and issues a final legal notice for eviction of the tenant based on the merits of both the parties involved in the suit. The tenant must vacate the rented property once the court serves/issues the final eviction notice.
NOTE: It is important to note here that the whole process or means of eviction holds good only when a rental agreement is present. Therefore, landlords should prepare a rental agreement before letting houses/flats/land for rent to potential tenants to prevent future discrepancies.
WHAT IF THE TENANT REFUSES TO VACATE THE RENTED PREMISES?
There exist possibilities when the tenant refuses to vacate the house even after the final eviction notice is issued by the competent court by threatening physically or with the help of goons. In such cases, the landlord can approach the court of law seeking judicial order to evict the tenant. Upon the judicial order being served, the landlord can seek police help to evict the tenant immediately.
It is incredibly important on the part of landlords not to manhandle or threaten the tenant, cut-off basic utilities like electricity, water supply or engaging in the process of ‘self-eviction’. That is, kicking out the tenant forcefully by throwing out the belongings of the tenant. It would become difficult to obtain the judicial order to evict the tenant if the landlord had engaged in these sorts of practices.
IMPORTANCE OF THE DRAFT MODEL TENANCY ACT,2020
As the majority of the state rental legislatures were pro-tenants, there was a huge outcry for the passing of an act to benefit landlords facilitating smooth eviction of illegal tenants. As a response to the outcry, the Parliament proposed the draft Model Tenancy Act,2020 by stating that the “existing rent control laws are restricting the growth of the rental housing segment.
CHANGES PROPOSED IN THE ACT
1. Setting up of a rent authority: As there are issues of opaqueness, unfair treatment and non-accountability in the sub-registrar office where the rental agreements are registered hitherto, this act proposed to set up a rent authority which registers duly agreed and signed rental agreements ensuring fairness, accountability and transparency in the whole procedure.
2. Expedite Dispute Resolution mechanism: Hitherto, Civil courts heard and settles rental disputes which took longer days for disposal as it was an additional burden on the civil court. As this act envisages a rent authority, the process of dispute resolution is speedier. If the decision of the rent authority is not satisfactory to any of the parties, they can challenge it in the rent court/rent tribunal which should dispose off the appeal within 60 days from the date of first hearing thereby, ensuring expedite resolution of disputes.
3. The rule regarding Security Deposit: As per this act, the landlord cannot charge more than two months’ rent as a security deposit which also should be returned to the tenant.
4. Time limit to enter the premises: The act stipulates that the landlord must give the tenant a notice of 24 hours in advance to enter the premise. The visiting time must fall between 7 am to 8 pm.
5. Additional rent for overstaying: The landlord is free to charge two times the monthly rent if the tenant had stayed for two months more than the due date stipulated in the mutually agreed rental agreement. He/she can legally charge four times the monthly rent for the use of the rented premises after two months in extension.
TAKEAWAY: The key point of consideration in rental disputes is ‘Negotiation’. Both the parties involved should be careful while preparing the rental agreement and negotiate the pre-conditions well in advance to prevent future incompatibilities. Both the parties must adhere to the rental legislations in place to avoid unnecessary controversies arising out of the difference of opinions. On the part of landlords, it is better to know your tenant before letting your house for rent and on the other hand, it is ethical and legal to adhere to the rent discipline on the part of tenants. Negotiation is the best form of dispute resolution!
REFERENCES
2. https://www.myadvo.in/blog/how-to-legally-evict-a-tenant-in-india/https://timesofindia.indiatimes.com/business/india-business/how-to-handle-a-tenant-who-refuses-to-vacate-your-property/articleshow/67884887.cms#:~:text=You%20can%20quote%20the%20violations,the%20Transfer%20of%20Property%20Act.