In India, the first rent law was passed during the Bombay Presidency in 1915, and afterwards in 1939. This was later replaced by the Bombay Rents, Hotel, and Lodging House Rates Control Act, 1947. The Maharashtra Rent Control Act, 1999, is the final Act which has replaced all the former Acts in a bid to regulate the rental housing market in the State. According to Sapna, a Mumbai-based proprietor from Smilehomes, “The Maharashtra Rent Act benefits both the tenants and the landlords. The Act aims at providing affordable temporary accommodation to the residents of the State while ensuring a transparent relationship between the two parties.”

Both the Legislative Assembly and the Legislative Council had passed the Maharashtra Rent Control Bill, 1999, with amendments that aimed to unify the three different rent control laws in the State. This Act does not apply to any premises rightfully belonging to the Government or a local authority, premises let or sub-let to banks, any public sector undertakings or any Corporation established by the Centre or the State Act. A landlord is solely responsible for maintaining the entire residential or commercial building, and seek amendments thereof.

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What are the duties of the landlord and tenant under the Maharashtra Rent Control Act?

The Maharashtra Rent Control Bill, 1999, specifies the duties of both the landlord and the tenant -

Rent Conditions

The landlord maintains the right to decide the rent and increase it at the rate of four percent per annum from the date of the commencement of the Act. The landlord can also increase the rent at the rate of 15 percent per annum for improvements and alterations if 70 percent of the tenants provide written consent. The rent can be further increased by 25 percent per annum for specific structural repairs, exclusive of any repairs carried out under the Maharashtra Housing and Area Development Authority (MHADA) Act. If the taxes increase during the same period, then also the rent can be raised.

Eviction Conditions

Section 16 (1) of the Act provides that the landlord may recover possession subject to the provisions under Section 25. Section 25 states that a landlord is entitled to recover possession of any premises if the court is satisfied that the premises are reasonable and authentic. The landlord can also recover possession if the tenant, without the permission of the landlord, raises any permanent structure on the premises. If the tenant, his agent, servant, people claiming under the tenant or anyone residing with the tenant has been found guilty of conduct which is an annoyance or nuisance to the adjoining house, the landlord can recover possession. Moreover, if the tenant has been convicted of using the premises or allowing the premises to be used for illegal or any other unauthentic purpose then also, he is found accountable.

Rules for Rebuilding

The landlords have to meet various conditions for rebuilding purposes. They need to carry out certain undertakings, as mentioned in sub-section 6, which are -  

  • Securing sufficient funds to carry out the work
  • Planning for the proposed building should be prepared and approved by the concerned municipal authorities
  • The number of residential units in the new building should not be less than the number of residential units in the old building
  • Demolition work of the old building needs to be completed within three months and the new building should be completed within 15 months thereafter
  • The carpet area of premises in the new building must be the same as in the old building
  • If the landlord gives an undertaking that the carpet area of premises allowed in the new building is same as was in the old building, then the premises in the new building will be offered to the tenants of the old building

Responsibility for the repair of premises

According to the Act, every landlord is bound to keep the premises in good condition. If the landlord neglects repairs, the tenant can serve them with a notice of fifteen days. If the landlord refuses to comply with the notice, the tenant is eligible to make the repairs themselves and deduct the expenses of the repairs from their rent or recover the amount otherwise. The recoverable amount should not exceed one-fourth of the rent payable by the tenant for that year.

The legalisation of the pagdi system

In the case of redevelopment of old properties in Mumbai, there is a reference to pagdi properties. Pagdi refers to the consideration paid to a landlord as a fine, premium or the consideration that has been legalised under Section 56 of the Rent Control Act 1999. The pagdi system has provided an assurance to the tenant, that despite price inflation or other fluctuations, their paid rent will be nominal. In few areas of South Mumbai, the pagdi system is prevalent where some tenants pay a rent of Rs 500 per month even when market rates might be as high as Rs 60,000.

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Transfer of Tenancy

As per the Act, it is lawful for a tenant to receive an amount in consideration of relinquishment or transfer of his tenancy. In Mumbai, for the transfer of tenancy, around 33 percent of the amount in the transaction is paid in cash to the landlord to effect the transfer of tenancy.

Another development of note is the Draft Model Tenancy Act (MTA), which is in the process of being implemented in many states in the country. It has various clauses covering the renting of residential premises which may differ significantly from the Maharashtra Control Act. However, being a Model Act, MTA may or may not be implemented by the Maharashtra government.

The Maharashtra Rent Control Act is, therefore, a comprehensive Act that explains the various elements related to rental situations in Maharashtra. This Act reduces ambiguity in terms of these elements and provides for a clear set of rules for both landlords and tenants to refer to in such situations.