Bolt from blue book: New rules to arm landlords

Source: The Economic Times
Land Owners To Be Authorised To Raise Rent At Regular Intervals; Forceful Occupation & Sub-Letting Not To Be Allowed
Rajat Guha
NEW DELHI
THE Centre is planning to amend the archaic rent control rules in a way the property owners also have a reson to smile. In the new revised rent control ACT, the land owners would be authorised to increase rent at certain intervals. A forceful occupation of the property will not be allowed.
Tenants who have been sub-letting the property also will not be allowed to do so under the new law. Urban development minister Jaipal Reddy recently said the ministry would soon bring out a new regulation.
"The rent control laws are very tricky and sensitive issues. They have to be sensibly dealt with. We are finalising the modalities for the revised law. for which we are in active dis-cussions with all concerned parties," a source in the Nirman Bhawan said.
According to sources, the new revised Rent Control Bill is likely to be tabled in the Monsoon Session of Parliament. The urban development ministry has written to the governments of Karnataka, Maharashtra, Andhra Pradesh, Kerala and Delhi urging them to standardise their archaic rent control laws as per the new model. These five states are the only ones with a Rent Control Act.
The ministry will first implement the rent control Act in Delhi. The model would then be replicated in other states. However, sources said that no price bands for rent would be fixed. "It would be for states to decide as land is a state subject," a source said. Although real estate is a state subject, the urban development ministry regulates property-related issues for New Delhi as formal statehood has not yet been granted to it.
According to experts, rent control laws are responsible for degeneration of the quality of life in civic habitations. When it becomes difficult to remove a tenant paying very low rent, landlords stop taking interest in maintaining the property. The tenants, too, don't spend money on maintenance as they do not own it. The assets, therefore, deteriorate.
States, too, lose substantially in the form of low collection of taxes from rental income. A recent National Real Estate Development Council (Nared-co) survey has estimated that at least Rs 2,400 crore annually is lost in Delhi alone due to low value of taxes on rented properties. This happens since the assessments are made on the rental values which are abnormally low, remaining unchanged at rates fixed half a century ago, thanks to the Rent Control Act.
Now Capital's water blues have started dogging the prospects of: Commonwealth Games also. As Delhi feels the chinks of absense of any water body with rampant deterioration of Yamuna over the years, the government is likely to host the water events for CW10 in Bhopal. Talks are on and the government is mulling various options to hold activities such as snorkeling, canoeing and boating in Bhopal's famous water bodies, bada and chhota taal. Delhi chief minister Sheila Dikshit has admitted that the government is considered many sites for water sports outside Delhi.