Date : 6th April, 2020

Lecture No. 06

After the definition clause, lets start with the provisions of the Act

Section 3 - Exemptions
Nothing in this Act shall apply to--
(1) Any accommodation belonging to or owned by any department of Government and/or
Board and/or Corporation promoted by and/or owned by the Government.
(2) Any other building and/or category of building(s) specifically exempted in public interest
by the Government through notification.

Section 4 - Tenancy Agreement

(1) Notwithstanding anything contained in Section 107 of the Transfer of Property Act, 1882
(Central Act 4 of 1882), no person shall, after the commencement of this Act, let or take on
rent any accommodation except by an agreement in writing.
(2) Where, in relation to a tenancy created before the commencement of this Act,--
(a) an agreement in writing was already entered into shall be filed before the Rent Controller.
(b) no agreement in writing was entered into, the landlord and the tenant shall enter into an
agreement in writing with regard to that tenancy and file the same before the Rent Controller;
Provided that where the landlord and the tenant fail to present jointly a copy of tenancy
agreement under clause (a) or fail to reach an agreement under clause (b) such landlord and
the tenant shall separately file the particulars about such tenancy.
(3) Every agreement referred to in sub-section (1) or required to be executed under sub-
section (2) shall be in such format and in such manner and within such period as may be
prescribed.

Section 5 - Rent to be as agreed

(1) The rent payable for any accommodation shall, subject to other provisions of this Act, be
such as may be agreed upon between the landlord and the tenant and it shall not include the
charges payable for amenities which may be agreed upon separately; and shall be payable
accordingly.
(2) Unless agreed otherwise every tenant shall pay the rent by the fifteenth day of the month
next following the month for which the rent is payable.
To under stand the above provisions properly following questions will be helpful

What Is The Legal Validity Of A Rent Agreement?

Nearly 12 million housing units in urban parts of the country continue to lie vacant even
though millions of people including workers and students, happen to be migrants looking for
rented accommodations, data indicate.

Official numbers show that of the 37.4 million students who pursued regular higher education
courses in 2018-19, approximately 15 million were migrants. According to industry
estimates, by 2023, the migrant workforce in India’s major urban centres would be seven-
million strong.

Currently, archaic laws rule over India’s rental realty market that first came into effect after
the First World War in 1908. While attempts have been made by the government on several
occasions to alter the situation, the Model Tenancy Act, 2019, which is still in the works,
aims to better regulate the rental market in India. While the model law awaits a Cabinet
approval, rent agreements continue to be regulated under the Rent Control Act of 1948 and
the Registration Act of 1908. As the Model Tenancy Act, 2019 is yet to become a law, we
will study the legal validity of a rent agreement vis-à-vis the provisions of the existing
legislation.

You may like to read: How Model Tenancy Act 2019 Will Change India’s Rental Market?
Before moving forward, it’s important to note here that every state has a rental law of its own
while some provisions of Central laws also apply.

What is a rent agreement?

A rent agreement provides tenancy for a short period, which is later renewed after the
completion of the period. Generally, a landlord and a tenant make a rent agreement for a
period of 11 months, with an option for a periodic renewal.

Is a rent agreement required?

Why create a rent agreement if your landlord is willing to make a verbal contract? Well,
verbal contracts have no legal validity and either part can breach the pre-established terms
and conditions without having to face any action for it. Let’s look at it this way. If you are a
tenant, your landlord wouldn’t be able to evict you before the lease period terminates just
because the two of you had an argument. Similarly, the landlord would be within his legal
right to evict a tenant if they find them involved in wrong doings. A tenant wouldn’t be able
to get away after neglecting his responsibilities if there is a binding agreement.

Is rent agreement registration mandatory?

Under Section 17 of the Registration Act, an arrangement between a tenant and a landlord
that involves occupancy of the latter’s premises for a one-year period must be registered in
the Sub-Registrar’s Office. Registering a rent agreement is optional in case it’s made for a
period of less than 12 months.

Should you opt for an 11-month rent agreement?

Majority of rent agreements in India are crafted for an 11-month period to avoid the hassle of
registration by both parties. “Despite no registration, an 11-month rent agreement is legally
valid and is admissible in the court of law in case of a dispute between the tenant and the
landlord. This is precisely why most rental arrangements are made in this manner and
periodically revised or not as both parties deem fit,”

What if the lease period is for over 12 months?

Registering the agreement becomes mandatory if the tenancy period mentioned is 12 months
or more. Unlike an 11-month arrangement which remains legally valid despite the absence of
registration, a lease for a 12-month period or more would be null and void if it’s not
registered.

Whose responsibility is it to register the agreement?

The landlord is responsible for registering the document while tenants typically bear the
monetary charges.

What are the rent agreement registration charges?

The tenant has to pay a stamp duty, which varies from state to state along with registration
charge (varies between Rs 500-1,000) on registration of rental agreements. In Uttar Pradesh,
the stamp duty on rent agreement is four per cent while it is 0.25 per cent in Maharashtra.

What if one party passes away during the lease term?

In either case, the rights and responsibilities of the deceased pass on to their legal heirs.
Can a landlord evict a tenant?

A landlord should have a valid reason if he wants to evict a tenant. The reason could be
wrongdoing as prescribed by the Rent Control Act and Indian law, including terrorism or
crime against the state.

What should a landlord do?

If you are an owner, you can prevent your tenant from prolonging his stay in your property by
including a clause in the rent agreement on increasing the rent to four or five times the
existing rent, if he does not leave when the contract ends. This would put a check on such
tenants who play foul. However, if the tenant does not vacate the property even after the
notice, you can move court. The court can favour a landlord if it finds out that the tenant was
involved in any wrongdoing or the owner needed the property for his personal use. What
should tenants do?A tenant can't do much about the eviction if the owner wants the property
for personal use. However, if the landlord is trying to evict the tenant without any lawful
reason, he can seek police protection.

What the top court said?

To avoid litigations arising out of landlord-tenant disputes, the Supreme Court in the case
Anthony versus KC Ittoop and Sons passed an order that a landlord cannot eject a tenant for
at least five years, if the tenant has been paying the rent regularly as per the agreement
between the two parties. However, if the landlord wants to use the premises for his personal
use, he may ask the tenant to move out.

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