The demonetisation exercise has severely shaken up the rental business in Chennai, which is almost entirely run on cash transactions.
Houseowners and real estate brokers are vexed, cracking as their usual mode of doing business has been vastly inconvenienced by the November 8 move. On the other hand, tenants are worried about the mode to payment for their December rent.
In the past several years, many houseowners in Chennai have taken the ten-month advance and monthly rentals in the form of cash.
“When I moved into my current apartment, the owner refused to take the advance money via cheque nor did he want a cash transferred. He made it clear that the entire Rs. 2 lakh should be given in cash,” said R.Balaji who lives in Alwarpet.
Mr. Balaji said that his owner refused to give his PAN number when requested. “I had to submit my houseowner’s PAN details at my office. But when asked he refused saying that he cannot share it. He even denied a bill,” he added.
‘No transparency’
Mr. Balaji’s friend S. Sathish said that till date, dealings were not transparent in the rental businesses, but now transactions will have to be made in white.
“Even after demonetisation, my houseowner has made it very clear that I pay this month’s rent in cash, even if I was only able to pay it late.” Balaji’s houseowner had just one apartment that he has let out for rent but there are several for whom rental incomes run into lakhs of rupees every month.
“Landlords who own a portion or two use the rental money to meet their household expenses. They find it difficult to handle the huge money that they collect,” said R. Prabhu, a mediator specialising in locating rental property.
According to a real estate analyst, these landlords don’t disclose their income and evade tax.
“Houseowners should be made to disclose their PAN details in the rental agreement until then nothing can be done about this,” he said.
Real estate brokers in the city said that rental enquires have dipped drastically in the last 10 days.
A broker from Saidapet, who wanted to remain anonymous, said, “The peak period for brokers is between the 20th and 28th of every month. We get several enquiries and we connect people to houseowners. The last ten days have been gloomy. People who come request us to inform houseowners to accept cheques,” he said. Brokers who were getting 10-20 enquires per day are hardly getting one now. Tenants, who so long have been paying their rent by cash, are now requesting landlords to accept cheques. While some of landlords do not complain, others have a problem accepting bank transfers or cash.
