It is not always that everyone who invests in a house does so only to stay in it. Many people in India buy or construct a property with an investment objective. They bet their savings of a lifetime in the construction of a property, sacrifice months of sweat, and spend sleepless nights to take care of the property and rent it out to tenants for income. But even with all this hard work and genuine effort, some landlords are left with a hole in their pockets just because they were not aware of the landlord legal rights in India. It is true to a certain extent that the majority of the laws are pro-tenant (and it is for a good cause) in India. But the Rent Control Act and other laws passed by the Government of India that safeguard the tenant’s rights also safeguards the rights and interests of the landlord in India.
However, it is still difficult for a landlord to protect his property from troublesome tenants and unavoidable problems. So, as a landlord, you should know about the landlord legal rights in India.
- Why is the Rent Agreement Important?
- Landlord Legal Rights in India
Why is the Rent Agreement Important?
As a landlord, one of the most important parts of renting out your property to a tenant is signing the rent agreement. A rent agreement needs to be signed between the landlord and the tenant stating the details of rented property, monthly rental amount, rental period, and every other important information related to the rent. This agreement contains the terms and conditions for the lease of the property. This is the document that defines the rights of the tenant and the landlord that both parties have agreed upon. There are also several local laws that cover landlord and tenant rights. Many local rent control laws in India such as the Maharashtra Rent ACT 1999, Delhi Rent ACT 1995, Tamil Nadu Buildings (Lease and Rent Control) Act 1960, strictly regulate rental agreements. Here are some of the landlord legal rights in India.
Read More: The Difference Between the Rent Agreement and Leave & License Agreement
Landlord Legal Rights in India
1. Landlord’s right to screen and choose prospective tenants
As much as a tenant has the right to screen and choose a perfect property for his needs, a landlord has all the rights to choose who will live in their rental property. This includes the right to screen prospective tenants, such as confirming current employment, previous history of tenant behaviour, salary level, prospects for remaining with the employer, and landlord references from the previous landlords. Based on the background check, the landlord can decide whether to rent out the property to that potential tenant. Thus, landlords are legally free to choose among prospective tenants as long as their decisions comply with laws and are based on legitimate criteria.
2. Landlord’s right to evict a tenant
Rent agreements may contain some rules and clauses that protect the tenant from unlawful eviction. It may also have strict clauses and rules regarding house eviction that protects the landlord and his property from unfavourable situations. Some of the reasons for sudden house eviction include non-payment or delay in paying the rent, electricity bills, or utility bills, illegally subletting the property, intentionally damaging the property, using the rental property for illegal activities, antisocial behaviour that goes against societal norms, and end of the rental agreement period. Thus, being the owner of the property, the landlord has the right to evict an unsuitable tenant who breaks any of the above rules mentioned in the rent agreement. The Model Tenancy Act, 2019 aims to make things easier for landlords as well as tenants by ultimately addressing all the above-mentioned issues. The landlord also has the right to evict a tenant if he or she requires the building for his or her own occupation. In any of these cases, the landlord must give prior notice to the tenants (At least 2 months) and/or compensate them for the inconvenience caused, before evicting them.
Read More: How to handle tenant eviction?
3. Landlord’s right to a temporary recovery of possession
There may arise an unforeseen situation where you have to repair or alter your property which cannot be carried out without the building being vacated. In such cases, the landlord has the right to temporarily obtain possession of the property and get the tenant evicted temporarily for the purpose of repair, maintenance, addition, and alteration works to the building. Note that in these kinds of situations, as a landlord, you are entitled to give prior notice to the tenant. In extreme situations where the repairs need to be carried out immediately with the building being vacated, the landlord is entitled to reimburse the rent amount or compensate the tenant with sufficient funds for the inconvenience. In some cases, the landlord may also provide alternate accommodation for the tenants until the building becomes available to move in.
4. Landlord’s right to increase the rent
In a bid to balance the rights and interests of both landlords and tenants, there are many laws in India concerning rent. Although the landlords of the residential or commercial property have the right to charge rent at prevailing market rates and increase it periodically, there are heavy regulations governing the landlord’s right to increase the rent. According to The model tenancy act, 2019, the landlord must not increase the rent without giving at least three months’ notice to the tenant, and cannot increase rent in the middle of a rental term. Generally, in India, the rent increases at a rate of 10 percent per year or every two years for residential properties. However, the rental values of some states are subject to state-specific laws.
Even last year, when the lockdown restrictions and corona outbreak was at its peak in India, the Union Ministry of Home Affairs issues an order stating, “Wherever the workers, including the migrants, are living in rented accommodation, the landlords of those properties shall not demand payment of rent for the period of one month.” Further, it said that “If any landlord is forcing labourers and students to vacate their premises, they will be liable for action under the Act,” invoking measures under the Disaster Management Act, 2005. Thus, there are several laws that heavily govern rent and it balances the rights and interests of both the landlords and tenants.
Read More: How much security deposit to be collected by owner while giving property on rent in India?
5. Landlord’s right to be informed of necessary repairs
As a landlord, you have complete ownership of your property and with the consent of your tenant, you have the right to repair and maintain it. However, minor repairs to the property can be undertaken by the tenant. But in such cases, where the minor repairs and alterations are to be carried out by the tenant, the landlord has the right to be advised of necessary repairs.
As a landlord, it’s your legal responsibility to ensure that the property you rent out is “habitable” and problem-free to the tenants. A well-defined rental contract and basic knowledge of the landlord legal rights in India will greatly help landlords to stay away from legal troubles and other issues caused by tenants. It also helps landlords to successfully manage the whole rental process without any hassle. Thus, these are the landlord legal rights in India.