The Kerala Buildings (Lease, Standard Rent and other facilities) Bill has been drafted with an aim to bring in transparency and fairness in the rental market, writes BIJU GOVIND.
As in most property matters, the law of demand and supply seem to be turned on its head in the rough and tumble of the rental market. More and more houses and commercial buildings are released for rent, but rents and deposits rise exponentially, especially in big cities. And landlords and tenants seem to believe in the credo of being at their vituperative best when dealing with each other?
So can the Kerala Buildings (Lease, Standard Rent and Other Facilities) Bill, 2012, when made into law, inject sobriety into the market? The State government has taken into confidence all stakeholders, including the Kerala Vyapari Vyavasayi Ekopana Samithi, the Rental Entrepreneurs’ National Trust, the Rental Building Owners’ Association, the Confederation of Real Estate Developers Associations of India (CREDAI) and the All-Kerala Building Owners Association, for framing its provisions.
The Bill, to replace the 48-year-old Kerala Buildings (Lease and Rent Control) Act, 1965, is aimed at not only regulating the leasing of buildings but also ensuring the security of ownership. Its provisions, following the guidelines issued by the Centre, make registration of the agreement between the landlord and the tenant mandatory.
Officials say that issues such as fixation of fair rent and conditions under which occupants of rented buildings can be evicted have been causing problems for the government for several years. On several occasions, the Kerala High Court has called for amending the provisions as the constitutional validity of some of these have been questioned by disputing parties.
Many provisions have become obsolete and difficult to deal with in the changed socioeconomic scene in the State. The new Bill thus aims to clear the ambiguity in some of the provisions reportedly unsuitable to local conditions and protect the rights of both landlord and tenant. Bringing in uniformity and transparency in the fixation of rental rates of houses, apartments, commercial complexes and warehouses is another aim.
The rents charged these days are considered unreasonable. People complain that the rates in Kozhikode, even higher than in Thiruvananthapuram and Kochi, are increased every year with no justification. The landlords in the city collect more than seven times the monthly rent as deposit. In Thiruvananthapuram and Kochi, tenants have to pay three months’ advance to occupy a house or flat.
A major provision in the new Act is that the rental agreement between the owner and the tenant should be made mandatory. A statement in writing signed by both should be furnished to the secretary of a local body, stating the location of the building and other details within 15 days from the date of commencement of the tenancy agreement, along with a filing fee of Rs. 50.
However, the condition that the landlords should inform the police the details of the tenants has been removed. All buildings, except government and semi-government ones, will come under the purview of the new legislation. Buildings rented out without an agreement will be given time to get one within a year on a consensus between the owner and the tenant. An arbitration committee will be set up to settle disputes, officials say.
The rent payable shall be increased by 20 per cent every three years. The registration fee will be reduced to 1.5 per cent from the proposed two per cent.
Every tenant need to pay other charges, if any, payable within the time fixed in the agreement. For delay in the payment of rent and other charges, if any, the tenant shall be liable to pay simple interest at the rate of 12 per cent a year. The rent control courts and the appellate authorities constituted under the existing law will continue in the new regime.
Law to make registration of rental agreement mandatory
To regulate leasing, ensure ownership security
To bring in uniformity and transparency in fixation of rent