MODULE – 1 , MUDD - I I, FOA 163710002 Sankeerthana .

A
163710008 K. Sai Prashant
RENT CONTROL ACTS 163710011 Nalini Kanth
163710014 Prashant.P
 TABLE OF CONTENTS

S.No Topic Pages

1 Introduction, Tenure for housing – Pre independence 3-5
2 Tenure for housing – Post independence (Five year Plans ) 6 - 19
3 Demand and Supply 20 - 24
4 Policies related to rent control act 25 - 32
5 Institutional housing 33 - 34
6 Effect of demonetisation and GST on rents and land tenure 35 - 37
7 References 38

2
INTRODUCTION

 Housing is one of the basic needs of the human beings.

 An individual needs his own space and privacy , which can be provided by the house which may be
owned or rented.
 Thus, Housing deserved a significant attention in the context of developing policies and strategies for
human development.
 The introduction of legislation policies towards rent control was post First war through the Contract of
lease .
 This further after the Second world war ,these policies became more acute where the “personal freedom
of contracts were restricted for the cause of social liberty”.
 Due to rapid growth of trade, commerce & industries, there was huge inflow of migrants which led to
high concentration at one place leading to a necessity of “Enacting legislations relating to lease”.
 Finally the state had to intervene to get an organized system to protect the tenant against exploitation ,
thus “Rent control legislations were enacted for controlling the rent & evictions”.

3
 RENT CONTROL ACTS – PRE INDEPENDENCE

 This legislation initially was confined only to the big cities of Bombay, Calcutta and Rangoon.
 The first Act passed by any Indian Legislature is the Act of 1918, The Bombay Rent Act 1918 , followed
by the Bombay Rent Amendment Acts of 1920 and 1923.
 Similarly in 1920’s “Rent control act for Calcutta and Rangoon “ were formed The Bombay Rent Restriction
Act 1939 was formed to restrict the increase in rental costs, which was followed by the Bombay Rents,
Hotels and Lodging Houses Rates Control Act,1947.
 The Bombay Rents, Hotels and Lodging Houses Rates Control Act,1947. an Act to amend and
consolidate the law relating to the control of rents and repairs or certain premises, rates of hotels and
lodging houses and of evictions.
 WHEREAS it is expedient to amend and consolidate the law relating to the control of rents and repairs
of certain premises, of rates of hotels and lodging houses and of evictions.
 Till 1947, there were no initiatives taken towards the “ group housing & co-operative housing “ and later
after the formation of five year plans , housing sector gained importance.

4
 RENT CONTROL ACTS – PRE INDEPENDENCE
S.NO STATE NAME OF ACT
1 Gujarat The Bombay Rents, Hotel and Lodging,
House Rates Control Act, 1947 (Bom,
Act No.
57 of 1947)
2 Maharashtra The Maharashtra Rent Control Act,
1999 (Maharashtra Act 18 of 2000)
3 Uttar Pradesh The Uttar Pradesh Urban Buildings
(Regulation of Letting, Rent and Eviction)
Act, 1972 (U.P. Act No. 13 of 1972)
PREVIOUS ACT (IF ANY)
Bombay Rent Restriction Act, 1939
and the Bombay Rents, Hotel Rates and
Lodging House Rates (Control) Act,
1944
The Bombay Rents, Hotel and Lodging
House Rates Control Act, 1947, The
Central Provinces and Berar Regulation
of Letting of Accommodation Act,
1946 and The Hyderabad Houses
(Rent, Eviction and Leases) Control
Act, 1954
The United Provinces (Temporary)
Control of Rent and Eviction Act, 1947
5
TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )

FIVE YEAR PLANS – INDIA

• Five-Year Plans (FYPs) are centralized and integrated national economic programs.

OBJECTIVES:
1. To promote a rapid rise in the standard of living of the people by efficient exploitation of
the resources of the country,
2. Increasing production and
3. Offering opportunities to all for employment in the service of the community.

6
TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
FIRST FIVE YEAR PLAN ( 1951 -1956 )
ISSUE: INFLUX OF POPULATION – MIGRATION
FOCUS: AGRICULTURE AND HOUSING

 Social Housing Schemes namely Integrated Subsidised Industrial Housing Scheme and LIG
housing
Marginal role for the private sector in LIG housing, provision of housing loans and funds
 1952: Subsidised Housing Scheme for Industrial Workers and Economically Weaker Sections
 1954: Low Income Housing Scheme
 1956: Subsidised Housing Scheme for Plantation Workers
 1956: Slum Clearance and Improvement Scheme
 34% of the total investment in the economy towards the housing sector
 New towns developed - Chandigarh city (Punjab) ; Sardar Nagar city (Ahmedabad); Gobind
Nagar & Hastanapur city (U.P)
 1.3 million houses were added by the end of the scheme
7
TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
SECOND FIVE YEAR PLAN ( 1956 -1961 )
FOCUS : RAPID INDUSTRIALIZATION - HEAVY & BASIC INDUSTRIES
ISSUE: INCREASE IN LABOUR – WORKING POPULATION ;
 1959: Middle Income Group (MIG) Housing Scheme
 1959: Rental Housing for State Government Employees
 1959: Village Housing Projects Scheme
 1959: Land Acquisition and Development Scheme
 1961: Rent Control Act
 Assistance from institutional bodies (Eg: Life insurance company ) – Financial assistance- Housing finance
to private developers
 Central government & Institutional bodies like LIC – funded state governments/ local bodies

‘Affordability’ was perceived to be the key problem in the housing sector, particularly for lower income groups.
1. the high cost of providing housing (because of Gap addressed - not by increasing incomes but by using
land and high construction costs) large subsidies to ‘reduce’ the cost of housing - direct
2. low income levels that made this expense price controls - RCA
difficult to meet. 8
TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
THIRD FIVE YEAR PLAN ( 1961 -1966 )
FOCUS : HOUSING POLICIES BE FORMULATED WITH REFERENCE TO ECONOMI C DEVELOPMENT AND INDUSTRIALIZATION
POLICIES

Policy guidelines were formulated

1. Housing policies should be linked with economic development and Industrial Polio lea of the
country.
2. All the efforts made by the various agencies for increasing housing stock o f the country, have to
be co-ordinate effectively.
3. Efforts should be made to give preferential treatment t the Low Income Group (LIG) community
both in the private and public sector housing activities

• The Third Plan recognized the availability of sufficient and affordable land as central to the success of
all housing schemes.
• also emphasized the preparation of master plans and regional plans for metropolitan areas, industrial
cities and resource areas.
• The creation of state housing boards was also given a push during this time.
• Since the level of housing activity by public authorities was perceived to be low, financial institutions
were also established during this time to provide the requisite financial assistance to metropolitan
authorities, newly established state housing boards and other urban institutions 9
TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
FOURTH FIVE YEAR PLAN ( 1969 -1974 )
FOCUS : UPGRADING THE LIVING CONDITIONS OF SLUM DWELLERS (IN SIT U UPGRADING) OR PROVIDING LAND AND
INFRASTRUCTURE ON WHICH THE POOR COULD THEN BUILD THEIR HOMES (S ITES AND SERVICES PROJECTS)
ISSUE:
 Growth of new slums , deterioration of living conditions , increased construction of dwelling units
 Special favour to the housing of SC’s and backward communities
 1970: Housing and Urban Development Corporation (HUDCO) established - supply of financial
resources to the Housing Boards and the Co-operative Housing societies throughout the country (Public
housing finance)
 1971: Provision of House Sites of Houseless Workers in Rural Areas To provide them with minimum
health facilities
 1972: Environmental Improvement of Urban Slums
 Provision of minimum health facilities to slum dwellers -

For planners - housing” comprised attributes beyond shelter alone – to encompass location, transport, access
to services and tenure. (Government was responsible)

Increased emphasis on financing reflected a shift in addressing affordability from the income as well as
the cost side of the problem, particularly for middle and higher income groups.
10
TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
FIFTH FIVE YEAR PLAN ( 1974 -1977 )
FOCUS: BEGINNING OF THE “CROSS-SUBSIDIZATION” APPROACH WITH SCHEMES FOR HIGH-
INCOME GROUPS LAUNCHED WITH THE OBJECTIVE OF PROVIDING HOMES FOR LIG AND
EWS
 Aim: to establish correlation between Housing Policy and the adopted Land Policy
 Low cost housing techniques, low cost building materials, strengthening existing schemes – to improve
lining conditions
 Twenty point programme - Under Housing - Provision for house sites, Assistance for construction of
house.
 Minimum need programme – ‘Garibi hatao’, Basic components (elementary education, health, water
supply, roads, electricity, housing facilities to labour, improvement of slums and nutrition.
 1976, the Urban Land Ceiling and Regulation Act (ULCRA) was formulated to force ‘surplus’ urban land
onto the market.
 1977: Housing Development Finance Corporation (HDFC) established

11
TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
SIXTH FIVE YEAR PLAN ( 1980 -1985)
FOCUS: RATHER THAN USING SUBSIDIES, PROGRAMS BE DESIGNED TO MEET THE PAYING
CAPACITY OF BENEFICIARIES
Using public resources for housing facilities to the houseless

Objectives –
 Provision of house sites and assistance for construction of dwelling units ;
 Public housing schemes ; encourage self help housing;
 Strengthen financial resources of public agencies;
 Research – building technology

Rental Housing Scheme for the State Government employees

Limitations - ( 1970’s to 80’s)

• Government employees were the main beneficiaries of public housing expenditure
• MIG/HIGS benefited from deepening of the housing finance market
• Public housing was usurped by HIGs ; Despite efforts towards integration, programs remained fragmented
• Peripheral use of community participation
• Frequent changes to structure and of institutional frameworks of programs
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TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
SEVENTH FIVE YEAR PLAN (1985 – 1990)
Focus: Increasing emphasis on community involvement in project design
Shortage – 24.7 Million Units / Projected requirement – 16.2 Million

Establishments of HOUSING FINANCE COMPANIES

• NATIONAL HOUSING BANK (NHB) was established as an apex Housing Finance Institute - To regulate
the entire housing finance sector o f the country.
• independent Housing Finance Companies came Into being during the plan, like LIC Housing Finance
Ltd., SBI Home Finance Ltd., GIC Grlha Vita Ltd.

OBJECTIVES:

• Promotion and encouragement o f the self help housing.

• Identification of rural house sites and assistance for construction of houses to those who has been
already provided with house sites

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 TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )

OBJECTIVES: (Cont..)
•Cost o f housing unit under Social Housing Scheme to be fixed within the paying capacity of the
targeted group.
• Providing stimulus and support to provide housings to EWS and LIG groups.
• Deduction In construction cost by adopting low cost housing techniques and by Modifying the building
by laws and land use control.
• Harnessing science and technology for the development of chief and local building Materials.
SALIENT FEATURES :-
Significant development of housing sector has been made under the Indira Awas Yojana and
Minimum Need Programme

 Equity capital of HJUCO was proposed to increase from. 50 crores to 135 crores.

 Giving due considerations to the Housing Schemes started in the earlier plans

 Minimum Need Programme , Slum Clearance , Urban Development and urban housing Schemes –
Special Considerations during the plan period. 14
TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
EIGHTH FIVE YEAR PLAN (1985 – 1990)
Focus : To eliminate the housing shortage scenario
OBJECTIVES:

• Expand the provision of basic Infrastructure facilities , in the rural and urban areas.
• Remove legal constraints to Increase the supply of serviced land as well as rental housing.
• Extend stimulus and support for private housing , through finance institutions , tax incentives , etc.
• Encourage the use of low cost building materials and cost effective technologies .
• Promote self help housing as well as shelter up gradation to the poorer segment of the rural
population
• Provide formal and institutional support
• Establish an effective management information system for housing and urban infrastructure
• Evolve special assistance programme - Subsidy , differential rate of interest.

15
 TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )

SUGGESSIONS:
• Increase the availability of residential land , with particular reference to the need of the poor sections
• Support incremental self building through financial and technical support
• Encouragement to up gradation and progressive development of low income settlements
• Promotion of Advanced technologies that can maximize the use of recycled material
National Housing Policy:
• This policy looked at land, materials, finance, technology and targeted poverty alleviation as part of an
integrated and comprehensive solution to the housing.
• The policy suggested easy access to institutional finance at affordable rates as a pre-requisite for
accelerating housing investments.
Criticism (NHP) -
• Policy did not actually address the issue of income, but rather focused on reducing minimum standards by
legislation to make the cost of a project accessible for different income categories.
• It did nothing to correct the existing structural inequalities in the land market or remedy the skewed land
holding pattern 16
TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )

NINTH FIVE YEAR PLAN (1997 – 2002) :-

Focus: on increasing agricultural and rural income and to improve the conditions of the marginal
farmer and landless labourers,

• Accelerated development of housing, particularly for the low income groups and other disadvantaged
groups,
• Social schemes are implemented in state sector with state plan provision and loan assistance from
HUDCO and other financial institution.
• The cabinet since has been taken a decision to repel ulcra.(Urban land and regulation act,1976)

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TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
TENTH FIVE YEAR PLAN (2002 - 2007) :-

• Strengthening of vulnerable houses in EWS & LIG category,.

• National Urban Housing and Habitat Policy, 2007 was announced in December 2007.

• Taking into account emerging challenges of required shelter and growth of slums, the first ever
urban areas specific

• Public private partnerships brought to the urban agenda

INTRODUCTION OF HOUSING SECTOR

• The activities covered under this sector includes development of residential accommodation both at
the state quarters as well as the districts and sub-divisional levels for government employees

• The main idea behind HOUSING SECTOR is not only to improve housing conditions and for
providing basic amenities to the government employees but also emphasizes new construction and up-
gradation of housing besides generating revenue through house rent and license fee deducted from
their salaries.
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 TENURE FOR HOUSING – POST INDEPENDENCE ( FIVE YEAR PLANS )
ELEVENTH FIVE YEAR PLAN (2007 - 2012) :-

• Social security will be treated as an inclusive concept that also covers housing, safe drinking water,
sanitation, health, educational and cultural facilities for the society at large
• The Jawaharlal Nehru national urban renewal mission (JNNURM) is directed to provide improved urban
services.
Prime Minister's New 15-Point Programme for the Welfare of Minorities

•Improving the Conditions of Living of Minorities :

1. Equitable share in rural housing scheme: This is sought to be achieved through the IAY for poor
beneficiaries from minority communities in rural areas.
2. Improvement in condition of slums inhabited by minority communities: Ensuring provision of
physical amenities and basic services to be equitably extended under the schemes of the Integrated
Housing and Slum Development Programme and JNNURM to the minority communities and to cities/slums
with minority concentrations.
ACHIEVABLE

•Rural Housing / IAY : To construct 60 lakh houses; an allocation of Rs. 26,882.21 crore (at current
TARGET

prices) is provided for the Plan period. Unit costs of housing, pegged at Rs. 25,000 for plain areas
and Rs. 27,500 for hilly areas, to be revised.
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 DEMAND AND SUPPLY
Tenant Classification:
• Rental housing – preferred by floating population, new migrants, population with low income profile.
• In India – migrant population are major components of the tenant population.
• Types of Migrants in India:
i. Long Term or Permeant migrants – but keeping ties with native village/town.
ii. Seasonal migrants – stay for more than 60days and returning back for some period.
iii. Migrant ties to the employers – move from one place to another.
Determinants of rental Housing:
• Demand determines the scale of rental housing in a city.
• Demand for rental housing is directly linked to the migration rate into the city.
• Unless there is demand, rental housing market will not strive.
• India migrant population = 29%
• 59% migrate from rural to urban in search of livelihood.
• Migration and urban mobility theories predict a gradual shift from tenants to ownership housing.
• But there is distinctions between actual mobility and desired mobility.
• Actual mobility determined – market conditions and socio economic profile of households. 20
DEMAND AND SUPPLY
• They include :
i. Opportunities of livelihood especially in terms of casual and unskilled labor.
ii. Affordability.
iii. Stage in life cycle of household
iv. Lack of access to ownership housing.
• Informal market is uncontrolled by any regulations – rents tend to be much higher.
• 26% urban poor households estimated income Rs.578 per captia per month.
• Migrant labor earns Rs.20 or less/day. (Bench mark calculated by the planning commission, 2011).
Supply of Rental Housing:
• Rental Housing plays a key role in housing supply.
• An understanding that 90% of the investment and 70% of the supply of housing being in the private
sectors.(USAID, 1989 (KUNDU 1993)).
• All informal housing is called slums, which also got rental component in it.
• The owners of the self built housing too are interested in renting to earn extra income and recover
investment in housing.
• Supply mechanism of rental housing can be described under two types:-
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DEMAND AND SUPPLY
Squatter Settlements :-

• Settlements come up on vacant lands or land which are under disputes.

• Found near river beds, low lying areas, marshy lands etc.

• Where the support coming from political instruments on these squatter settlements to attract votes.

• As time passes, households manage to built more tenements and put up for rent.

• Low quality and high risk of eviction- the rents are considerably low.

• These settlements come up near place of work.

Quasi – Legal Settlements:

• As explained by Metha & Metha, 1987 – those which consists of quasi – legal – sub divisions and
tenement construction.

• These settlements are of three types :-

o Community based sub divisions –

• Community buys or leases out land from a landlord with the help of some middlemen.

• Sub- divisions allocations are carried by group leaders, who determine the rents to be paid.

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DEMAND AND SUPPLY
o Landlord based sub divisions :-

• Lands on the peripheral areas are not likely to get good returns.

• The landlords tend to give out such lands for housing.

• Rents on these lands are found to be higher than the actual market.

• This renting and selling of land was done to escape losing out land under the Urban Land Ceiling Act,
1976.
o Owner Developed Rental Units :-
• The owner undertakes both land sub divisions as well as shelter construction.
• Without the consent of the local authority.
• Overtime these settlements come to be served by the local authorities.
• Such settlements in previous case, are situated in the peripheral lands or areas which are kept under
green belts.
• It is found that 80% of the settlements are developed on private lands, were landlords have strong
links to the local politicians.
• Public lands are more open to squatting as there is low supervision on such lands.
• Sunil Kumar (2001, 1994, 1996) – states the landlords is no different from the tenants in terms of
socio – economic and financial conditions.
23
DEMAND AND SUPPLY
Other less potent suppliers of rental housing :-
•Government – confined to its employers.
•Housing cooperatives – where some owners would rent out part or entire house for rent.
•Industrial Housing – where employers construct rental housing for the workers.
•Early industrial cities constructed homes to attract workers from rural areas.
•1950’s and 1960’s – Central government had two schemes
•Subsidized Industrial Housing Schemes (SIHS)
•Integrated Subsidized Housing Schemes (ISHS)
•The main focus on industrial rental housing.
•In 1980’s some cities took their own initiative to create night shelters to the homeless poor, which went into
abuse on account of lack of their management.

Issues
•Major problem embedded in rental housing – government approach to urban poor housing is focused on
providing ownership housing.

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 POLICIES RELATED TO RENT CONTROL ACT
•Rent Control Act – Implemented by State Governments.

•For encouraging fair return on the investment by landlords and preventing undue harassment of
tenants.

•The first Rent Control Legislation in India implemented in Bombay (1918).

•Under thee Indian Constitution housing is a state subject, so the enactment and enforcement of
rent control laws is responsible of the individual states.

•All the Rent Control Acts and Legislations intended to serve two purposes:

i. Protect the tenant from eviction from the house,

ii. To protect him from having to pay more than a standard rent.

•Taking the references of Mumbai – the rents is Mumbai is controlled mainly by two acts:-

i. Bombay Rent Act – 1947

ii. Maharashtra Rent Act - 1999

25
Bombay Rents, Hotels and Lodging House Rates Control Act, 1947:
•Implemented to amend and consolidate the low relating to the control of rents and repairs of certain
premises, rates of hotels and lodging houses and its evictions.

Highlights of this act:

•The basic purpose is to prevent the tenants from eviction by the landlords and provide for a stable and
reasonable rent for the tenant and develop the rental stock of the city.

•Provided rent or licence fee or charge in excess is illegal.

•Increase in rent was provided only if there is any improvement or special additions etc,

•The court may fix standard rent and permitted increases in certain cases,

•No ejection is to be done If the tenant is ready or willing to pay standard rents,

•In absence of contract to the contrary, tenant not to sub let or transfer or to give on licence,

•Landlords not to cut off or withhold essential supply or service,

•Conversion of residential into non residential permission was prohibited according to the act.

26
Maharashtra Rent Control, 1999:
•Basically derived from the earlier act of Bombay Rent Control, which is applicable to the whole state of
Maharashtra.
Highlights of this act:
•The main aim of this Act is to have a single law to deal with control of rent and repairs of certain
premises,
•This law also dealt with the conditions under which tenants could and could not be evicted
•Apart from the above, this law aims at encouraging the construction of new houses by assuring a fair
return on the investment by landlords.
•This act unified, consolidated and amended all the three rent acts (Central Province and Berar Act and
Hyderabad House Control Act) of Maharashtra into one and is applicable to the whole state of
Maharashtra.
•The act was enacted for controlling rents so that they may not exceed beyond the standard rent or fair
rate.
•This act was applicable to the premises let for the purposes of residence, education, business, trade or
storage in the areas specified in the act
•Certain premises are exempted under this act; namely premises belonging to government or local
authority or government as tenant, licensee.

27
Maharashtra Rent Control, 1999:
•From the commencement of the Act that is from 31st March, 2000 the landlord will be entitled to
increase the rent by 4% per annum in respect of premises let for purposes of residence, education,
business, trade or storage.

•The Act does not make separate provisions for hotels and lodging houses.

•Agreement for grant of tenancy or licence is required to be in writing and registered under the
Registration Act.

•The act allows the landlord to inspect the premises let or given on license at reasonable time after
giving prior notice.

Task Force Report on Policy and Interventions to Spur Growth of Rental Housing
in India:
•Prepared by a Task Force on rental housing headed by Chairman, Jaithirth Rao under Ministry of
Housing and Urban Poverty Alleviation.

•Mainly constituted to look at means of increasing the stock of Quality Rental Houses.

•By focusing on two key enabling areas

i. creating a legal and regulatory framework

ii. making tenancy easy in individual house in smaller cities/towns.

28
Task Force Report on Policy and Interventions to Spur Growth of Rental Housing
in India:
Recommendations:

•Rent Control is only necessary for those houses that are targeted at the EWS/LIG segment. There is no
need for Rent Control to be applied across the spectrum of Rental Housing.

•If required, vouchers could be issued by the government using UIDs (Unique Identification Number) and
bank transfers to maintain transparency.

•Private developers should be encouraged to participate in rental housing by incentivizing and by giving
additional FSI.

•There has to be a bifurcation between the Rent Control Laws for applicable Commercial properties and
Residential properties.

•The focus of the Rental Housing Act should be on creating Affordable Rental housing.

•Employers wanting to offer Rental Housing / Rent-To-Own facilities to their employees could be given
specific grants / financial assistance by way of lower interest rates on funds borrowed for Rental
Housing projects

•Eviction Laws and Procedures should be simplified.

29
Model Residential Tenancy Act, 2011 and Draft Model Tenancy Act, 2015:
•The Model Residential Tenancy Act (MRTA), 2011 prepared by the housing ministry is intended to
replace archaic rent control legislation that capped rentals, resulting in landlords getting a pittance for
properties in prime localities in metros.

•Rent control is a state subject, the Centre is seeking adoption of the model law by mandating that only
states that enact this law would be eligible for funding under the flagship Rajiv Awas Yojana (RAY) and
comes with other benefits, such as interest relief.

•One of the issues with this act is that in Mumbai, where thousands of old properties are still rented out
under the longstanding "Pagdi System”.

•Pagdi System:- the tenant pays a big non-refundable lump sum at market rate at the beginning with the
understanding that the landlord will charge only a minimal rent.

•But recently the Government has come up with Draft Model Tenancy Act, 2015 as the earlier MRTA
2011 was left incomplete.

•The new draft act of 2015 takes into account the concerns of both the Landowners and tenants.

30
Features of Draft Model Tenancy Act, 2015:
•The new draft will ensure that landlords are able to charge market rates for their residential or
commercial properties, get the rents revised periodically and also get their premises vacated easily
without getting into long-drawn legal proceedings.

•Rent ceiling will be fixed in consultation with the state government to avoid arbitrary hikes.

•The security deposit charged from the tenant will be capped at three times the monthly rent, which is
currently charged more or less on an ad hoc basis.

•Tenants can claim a reduction in rent if the quality of services available to them deteriorates in any way.

•The new Act safeguards the interests of both the parties in a special court of law, so there is no reason
to believe that it will fail to have an impact.

•Landlords can expect rent that their property deserves and tenants will be saved from unexpected
rental raise and surprise evictions.

31
Benefits of reform in rent laws to states, ULBs and citizens:
States:
•Increased investment in housing will have
positive multiplier impact on State Domestic
Product (SDP) and will generate additional
employment.
•Increased supply of rental housing will lead to
reduced rent levels and a decline in number of
slums.
•Improved housing situation will reduce the need
to allocate government funds for housing and
release additional resources for financing other
social objectives.
•More efficient allocation of existing housing
stock will lead to increased productivity with
beneficial impact on economy of the state.
•Decline in number of court cases.
•Mitigation of social disharmony.
ULBs :
•Increased revenue from property tax.
•Reduction in number of sub-standard housing
units leading to improved quality of housing
stock in the city.
•Reduced burden on municipal finances on
account of diminished need to allocate funds
for upgradation of dilapidated housing, etc.
Citizens:
•Development of a healthy rental housing
market.
•Increased accessibility and affordability of
rental housing.
•Improved security of tenure.
•Reduction of black money deals on account of
unlawful payment.
32
INSTITUTIONAL HOUSING

In India, long term finance for housing is provided by the following institutions:
1. Commercial banks
Largest mobilisers of savings in the country;
2. Coorporative banks Required to earmark minimum of 3% of their incremental
deposits for extending it to housing sector
3. Regional rural banks
4. Agriculture and rural development banks
5. Housing finance companies
6. Cooperative housing finance societies

Corporative housing societies operate at a primary level and can be broadly classifies into four major
types:
1. Tenant ownership housing societies
2. Tenant co-partnership housing societies
3. House construction or housing building societies
4. House mortgage societies

33
INSTITUTIONAL HOUSING

 Renting requires a regular income stream, while owning requires access to a large amount of
accumulated finance because the purchase of a dwelling is very costly—indeed it is the largest
asset that most households will ever possess.
 Housing finance is a key part of the housing system, making homeownership possible for a much
greater proportion of the population
 Impact of Housing Finance on Housing Supply – Construction, Affordability and Reduced slum
living
 Construction: Rise in prices due to stimulation in land and construction markets which will lead to an
expansion in supply market of housing.
 Affordability – Housing finance schemes are accessible only to high-income households which led to
increase in financial schemes from various financial institution(increase in availability of finance and
lowered prices of units).
 Reducing Slum Living : new construction in the upper end of housing markets allows for the
movement of middle-income groups; this in turn motivates lower-income households to avail of the
lower-cost housing units previously occupied by the middle-income groups.

34
EFFECT OF DEMONETISATION AND GST ON RENTS AND LAND TENURE

 Price stability to increase the availability of rental homes: Stabilisation in property prices,
making it profitable for renting which would motivate owners to rent out their extra properties.
Result - increase the supply of rental properties.

 Increased demand will attract more investments: Successful implementation ushers economic
growth because of which new jobs are expected to be created. This is likely to increase the
demand in rental housing and this would further attract more investments.

 Standardisation of rental prices : As cash transactions reduce due to digitisation, it will bring
about increased transparency in the rental housing market.

 Improved services: To ensure quality services for rising demand for rental properties, a
professional approach to property management services will be developed.

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EFFECT OF DEMONETISATION AND GST ON RENTS AND LAND TENURE

There were certain results anticipated in the rental market due to demonetisation:
Short-term: Market to undergo a slowdown
Mid-term Impact: Reduced inflation, better home ownership appetite, improved rental landscape
Long-term impact: Transparency, revived trust and capital inflows in the realty sector

 There was an increase in the rental prices by 3 – 5% post demonetisation in cities where the
rental supply was adequate.
 Most of the preference has been shifted from purchase of property to rental options.

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EFFECT OF DEMONETISATION AND GST ON RENTS AND LAND TENURE

 At present, a 15% service tax is levied on sub-leasing of commercial property, while renting
or subleasing residential properties is generally exempt from service tax. Under the GST, a
tax rate up to 18% of the transaction value has been proposed.
 This has resulted in a hike in the rents across the nation
 The processing charges of loans and increase in taxes on EMI’s have increased post GST,
leading to an increase in demand for rental properties.

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 REFERENCES

S.No Title Author Month/Year of publication

1. Rent Control Laws in India Satvik Dev 2006
A Critical Analysis, Centre for Civil Society
2. Revisiting Low Income Housing Pritika Hingorani November, 2011
A Review of Policies and Perspectives,
Indian Institute for Human Settlements (IIHS)
3. Rent Control in India – Obstacles for Urban Aditya Alok and January, 2011
reform Pankti Vora
4. Newsletter - The express times -- May 2017
5. Newsletter - BDO News, India Amit Kumar Sarkar June 2017
6. Housing and Housing Finance—A Review of John Doling August 2013
the Links to Economic Development and
Poverty Reduction , Asian development
bank

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