Why there should have been a Rental Law in RERA
Feb 06, 2018 Real Estate News
The main objective of forming The Real Estate (Regulation & Development) Act, 2016, is to make the real estate sector organised, transparent and stronger. The law in the act protects the right of the buyers while forming a strict guideline for developers to follow. But it has ignored one of the most important parts of the property market that is the rental market. There are no as such rules in the act to govern the rental housing market. With renting being as important as buying and selling, RERA should have made some provisions to address concerns of this aspect also.
Here is why some laws addressing renting were necessary.
1.Like buying, renting is also done as per the unit size. According to the RERA law, it is mandatory to calculate the price of a property based on the actual carpet, whereas the rent is usually calculated on the basis of super built-up area. Hence if renting would have included in the RERA act, then it would have also calculated as per the actual carpet area.
2.The rental market is quite disorganised and lacks uniformity as different states have a different process. The landlord has been often seeing enjoying an upper hand while leaving the tenants in a helpless situation that leads eviction of tenants. But as per rental act, a tenant can only be evicted if he or she gets defaulted in paying rent on time or create some kind of nuisance without or the landlord decide to move into the rented premises.
3.People often discriminate between tenants on the basis of caste, creed, marital status, food preference, sexuality, the nationality which is completely wrong. Hence this aspect calls for a strong rental law.
4.Due to the formation of RERA, buyers now know about the rights. But there is a lack of awareness among the tenants about their right or state specific tenant protection law due to which the landlord enjoys the overall power.
5.Usually, after every one or two years, the landlord expects a 10 percent hike in the rent which acts as a financial burden and create a problem on the tenants and they start looking for another renting option which is cheaper or equivalent. And this is not just the problem for the tenant but also for landlords who cannot completely rely on a tenant on a long term basis if he or she increases the rent.
However, the government have already eyed on the prevalent wrong practices in the rental market. Such as salaried employees usually produce fake rent receipts, agreement and a pan card to avail tax exemptions if the rent exceeds Rs 1 lakh which is common these days. But now the assessing officer can ask for proof related to the license agreement, housing cooperative society’s letter, water bill, electricity bill etc. The landlords will also now have to report their complete rental income if they want to claim TDS benefits.
Here is why some laws addressing renting were necessary.
1.Like buying, renting is also done as per the unit size. According to the RERA law, it is mandatory to calculate the price of a property based on the actual carpet, whereas the rent is usually calculated on the basis of super built-up area. Hence if renting would have included in the RERA act, then it would have also calculated as per the actual carpet area.
2.The rental market is quite disorganised and lacks uniformity as different states have a different process. The landlord has been often seeing enjoying an upper hand while leaving the tenants in a helpless situation that leads eviction of tenants. But as per rental act, a tenant can only be evicted if he or she gets defaulted in paying rent on time or create some kind of nuisance without or the landlord decide to move into the rented premises.
3.People often discriminate between tenants on the basis of caste, creed, marital status, food preference, sexuality, the nationality which is completely wrong. Hence this aspect calls for a strong rental law.
4.Due to the formation of RERA, buyers now know about the rights. But there is a lack of awareness among the tenants about their right or state specific tenant protection law due to which the landlord enjoys the overall power.
5.Usually, after every one or two years, the landlord expects a 10 percent hike in the rent which acts as a financial burden and create a problem on the tenants and they start looking for another renting option which is cheaper or equivalent. And this is not just the problem for the tenant but also for landlords who cannot completely rely on a tenant on a long term basis if he or she increases the rent.
However, the government have already eyed on the prevalent wrong practices in the rental market. Such as salaried employees usually produce fake rent receipts, agreement and a pan card to avail tax exemptions if the rent exceeds Rs 1 lakh which is common these days. But now the assessing officer can ask for proof related to the license agreement, housing cooperative society’s letter, water bill, electricity bill etc. The landlords will also now have to report their complete rental income if they want to claim TDS benefits.
