An Article by RANJITHA.K B.A LL.B(HONS)
TABLE OF CONTENTS :
| • | Introduction |
| • | The Tamil Nadu Buildings ( Lease & Rent Control ) Act,1960 |
| • | The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act,2017 |
| • | Why 1960 Act was repealed by 2017 Act |
| • | Comparative Analysis on 1960 Act & 2017 Act o Act Applicability o Regulation of Rental Agreement o Eviction Process o Security Deposit o Maintenance and Repairs o Dispute Resolution o Penalities |
| • | Conclusion |
INTRODUCTION :
Tamil Nadu is one of the most urbanized state in India with an urban population of over 3.5 crores, which is almost half of the total population. The rapid pace of urbanization in the state has resulted in the lack of availability of affordable housing in urban areas, including the majority of rental housing. Rental housing had been a long standing challenge in Tamil Nadu with an immediate need for regulation. In order to control those challenges, the Tamil Nadu government had implemented the Tenancy Act called “ THE TAMILNADU BUILDINGS ( LEASE & RENT CONTROL ) Act, 1960. The said act was repealed by “ TAMIL NADU REGULATION OF RIGHTS AND RESPONSIBILITIES OF LANDLORDS AND TENANTS ACT, 2017 “
THE TAMILNADU BUILDINGS ( LEASE & RENT CONTROL ) ACT, 1960 :
The Tamil Nadu buildings ( lease & rent control ) Act,1960 received the assent of the President on the 24th September 1960. It contains 39 sections ( section 36 & section 39 was omitted ) and 2 schedules and 29 rules. First schedule is about the amenities available to the tenant along with the building which helps to fix the fair rent for both residential and non – residential building. Second schedule contains the rate of depreciation which shall be calculated for each year on the fixation of fair rent by the controller.
The Act was designed for the following objectives :
- To provide protection to tenants.
- To regulate the relationship between Landlords and tenants.
- To control rent in urban areas
- To address the housing shortage
- To ensure the welfare of tenants who were at a disadvantage in the rental markets
- To prevent unreasonable eviction of tenants in state of Tamil Nadu
- To provide guidelines for the fixation of fair rents and other related matters
According to section 4 of the said act, the controller shall fix the fair rent for both residential and non-residential building of about 9% gross return per annum on the total cost of such building on application made by the tenant or the landlord. The total cost includes the cost of provisions of amenities, market value of the site, cost of construction of the building. But the cost of provisions of amenities shall not exceed 15% of the cost of site in case of residential buildings, and 20% in case of non-residential building.
TAMILNADU REGULATIONS OF RIGHTS AND RESPONSIBILITIES OF LANDLORDS AND TENANTS ACT, 2017 :
The Tamil Nadu Regulations of Rights and Responsibilities of Landlords and Tenants Act,2017 was enacted on 14th July, 2017 and came into force on 22nd February, 2019. This Act has 47 sections, 3 schedules, 8 chapters and 12 Rules . First schedule consists of the Application for Registration of Tenancy Agreement with the Rent Authority. Second schedule is about the division of maintenance of property between the Landlord and the Tenant as discussed under section 15 (1) of the said act.
Third schedule speaks about the special category of Landlords specified under section 22 (1).
Main Objectives of the Act :
- To regulate the rent of the building
- To regulate the tenancy agreement with compulsory registration with Rent Authority
- To balance the rights and responsibilities of landlords and tenants
- To provide fast adjudication process for resolution of disputes and matters connected
- To regulate the tenancy in accordance with the terms of the tenancy agreement
- To protect the interests of both Landlords and tenants in the event of disputes
The 2017 amendment and subsequent legislation ( The Tamil Nadu Regulation of Rights and Responsibilities of the Landlords and Tenants Act, 2017 ) aimed to modernize and balance the rights and responsibilities of both the Landlords and the tenants. It sought to address the changing housing dynamics, urbanization, and growing demand for rental properties. The 2017 Act treats subletting as a new tenancy, which must be Registered with the Rent Authority. The landlord must also provide prior written consent for subletting, and the subletting rent cannot be more than the principal rent. The parties shall inform the expiry or termination of tenancy agreement in the prescribed form to the Rent Authority within 15 days from the date of such expiry or termination.
WHY 1960 ACT WAS REPEALED BY 2017 ACT :
The Tamil Nadu Buildings ( Lease and Rent Control ) Act, 1960 was repealed by the Tamil Nadu Regulations of Rights and Responsibilities of Landlords and Tenants Act, 2017 for several reasons. The reasons for repeal are as follows :
The Tamil Nadu Buildings ( Lease and Rent Control ) Act, 1960 was enacted as a social reform to protect tenants from exorbitant rent & unfair eviction. And also it was enacted when the real estate industry was evolving and ownership was concentrated in the hands of a few landlords. However, the real estate industry had changed over time, and the state’s urban development has grown. Though it had the avowed object of protecting the tenants and providing affordable housing, this act was abused by unscrupulous tenants to frustrate the landlords . 1960 act did not provide for transparency in rent agreements, leading to disputes and litigation.
Thus, the new act ( The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act,2017 )was enacted to regulate tenancy on the lines of model tenancy act,2017 indicated by the government of India and to protect the interest of both tenants and landlords. It simplify and streamlined the rental process, which made it easier for landlords and tenants to enter into rental agreements. So that both parties are aware of their rights and responsibilities and It protect the rights of both landlords and tenants, ensuring that they are treated fairly and Justly. It provides an effective and efficient dispute resolution mechanism to resolve disputes between landlords and tenants.
COMPARATIVE ANALYSIS ON 1960 ACT AND 2017 ACT :
- ACT APPLICABILITY :
The Tamil Nadu buildings ( lease &rent control ) Act, 1960 was applicable to the urban areas, particularly in city of madras, city of Madurai and to all municipalities constituted under the Tamil Nadu district municipalities Act, 1920. It applies only to buildings and to both residential and non-residential rents. Whereas, Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 has broader applicability, extending beyond urban areas to both residential and commercial properties in the state of Tamil Nadu. Urban areas includes the areas that fall under the jurisdiction of either the
Municipalities Corporation or the Municipality or the Town Panchayat or the Cantonment Board as the case may be. This act applies to all types of properties, including buildings, houses, and plots.
- REGULATION OF RENTAL AGREEMENT :
In the Tamil Nadu buildings ( lease &rent control ) Act, 1960 Rental agreements were mostly informal, and the Act were mandated to be registered for only those tenancy agreements and lease agreements that exceeded 11 months or exceeds Rs. 50,000/- in value. On the other hand The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 mandates registration with the Rent Authority within 90 days for all tenancy Written Agreements regardless of terms and values of the Tenancy. It applies to both commercial and residential tenancies including renewals. If tenancy created before the commencement of 2017 Act & no agreement was entered by the Landlord and the tenant, then the written agreement shall be entered within 575 days from the date of commencement of this act.
- EVICTION PROCESS :
The Tamil Nadu buildings ( lease &rent control ) Act, 1960 provides stronger protection to tenants against evictions by requiring a court order for eviction. The grounds for eviction were limited to a few reasons such as non-payment of rent, violation of tenancy conditions, or if the landlord required the premises for personal use. The Tenant’s right to remain in the property was heavily protected.
However in the Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 streamlined the eviction process. It still protects tenants from arbitrary eviction, but the grounds for eviction have been clearly defined, and the process has become more efficient. The Act allows for eviction in case of non payment of rent for 2 months, causing or let to cause damage to the property, and if the tenant overstays after the lease term ends.
- SECURITY DEPOSIT :
The Tamil Nadu buildings ( lease &rent control ) Act, 1960 caps the security deposit at 6
months rent. The said Act did not specifically regulate the amount of security deposit that could be charged, leading to some ambiguity and potentially excessive demands by Landlords. In contrast the Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 stipulates that the maximum security deposit should not exceed 3 months rent for residential properties. This provision aims to protect tenants from unreasonable financial demands by Landlords.
- MAINTENANCE AND REPAIRS :
In Tamil Nadu Buildings ( lease & rent control ) act, 1960 the Maintenance responsibilities were more ambiguous with the Landlord being generally responsible for major repairs. However, tenants were often expected to maintain the property and handle minor repairs. Whereas, Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 provides clearer guidelines on maintenance and repairs responsibilities. The tenants and the landlords responsibilities regarding the maintenance and repairs of the building shall be specified in the tenancy Agreements. It specifies that the Landlord is responsible for day-to-day upkeep. It also mandates that both parties should maintain the property in a habitable condition.
- DISPUTE RESOLUTION :
Tamil Nadu Building ( lease & rent control ) Act, 1960had provision for resolving rental disputes through Rent Controllers and courts. However, the process was often slow and lacked clear timelines, leading to delays in cases. On the other hand Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 introduced the concept of Rent Tribunals, which are aimed at expedient resolution. These Tribunals provide a more accessible and time-bound approach to resolving issues between Landlords and tenants. The law also specifies a time frame within which the Rent Tribunal must resolve disputes.
- PENALITIES :
Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017prescribes stricter Penalties for non-compliance, including fines and compensations. If a tenant doesn’t vacate the premises after their tenancy ends, the Landlord is entitled to double the monthly rent as compensation. If the property manager acts in contravention of the duties specified under section 19 of the act or acts against the instruction of the landlord then, the Rent Authority may remove the property manager or impose costs to compensate the loss occurred by the tenant or the landlord. The Rent Authority may impose the penalty on the person who cutoff or withhold the essential supply in the building not more than five thousand rupees as per section 20 of the said Act.
CONCLUSION :
While the 1960 Act was tenant-friendly, often favoring tenant rights and imposing stringent controls on landlords, the 2017 Act sought to modernize the rental law to reflect the realities of a growing urban population and the demands of the housing market. The 2017 Act introduces more flexibility and fairness by allowing market-based rent and faster, clearer dispute resolution mechanism, while still protecting tenants from arbitrary eviction or unfair rent hikes. The shift from a heavily regulated system in 1960 Act to a more balanced framework in 2017 Act shows an effort to create a more equitable rental ecosystem in Tamil Nadu.
AUTHOR
- – RANJITHA.K BA. LL.B (HONS)