Important Details About Delhi Rent Control Act That Every Delhite Should Know

The rent of a real estate property in Delhi is determined according to the Delhi Rent Control Act. The laws and regulations were constituted so that tenants and landlords had rights and obligations and operated under the law. The Delhi Rent Act was framed to keep a check on rent, and untimely eviction, and to provide affordable housing to the weakest sections of the city. Since 1958, the act has been amended to keep up with time. Let’s take a look at some of the significant features that have been included in the original Delhi Rent Control Act 1958.

What Is the Delhi Rent Control Act 1958?

The Delhi Rent Control Act 1958 was drafted by the government of India to safeguard the rights of tenants and landlords of the city. The Delhi Rent Act aims to provide affordable housing to all sections of society, keep a check on the increment of rent, and provide security to tenants towards untimely eviction. 

The Delhi Rent Control Act outlines specific grounds for eviction, such as non-payment of rent or misuse of the property by the tenant. The Rent Act applies to all residents residing within the limits of the New Delhi Municipal Committee and the Delhi Cantonment Board. The Delhi Rent Control Act notes the rights and obligations of the tenants and landlords towards each other and the state of Delhi. 
Read: Buying a Leasehold Property: Important Things You Should Know

Let’s take a look at some of the key provisions made with the Delhi Rent Act.

Delhi Rent Control Act: Key provisions

Delhi Rent Control Act Notes:

• “Landlord”: a person entitled to receive rent, either for a definite period on behalf of themself or the respective owner of the property.
• ‘Tenant’ is the person responsible for paying the rent of the premises. This includes anyone and everyone living on the premises during the tenure of the contract. Tenant also includes sub-tenant and in case of death, the person in possession is subject to the order of succession. 
• Exemptions: The act is not applicable on government premises or properties. 
• The rent should be transferred latest by the 15th of a month if there is no written date mentioned in the rental agreement. The tenant is also subject to receiving a receipt for the payment of rent if demanded.
• If the rent is paid on time, the landlord has no permission or rights to evict the tenant. 
• The rent increment has been fixed in terms of a ‘standard rate’.
• According to Section 7 (1), the landlord can hike the ‘standard rent’ if the property was renovated. In such cases, the increment shouldn’t exceed 7.5% of the total budget of the construction.  
• The tenant has the provision to sublet the flat. 

Latest Amendment Delhi Rent Control Act

After having the first official version in 1958, the Delhi Rent Act has been revised and amended quite a few times. There has been a constant demand for change in the code from the association of homeowners and in some instances tenants as well. The rules and regulations from Delhi Rent Control Act Bare Act have been amended since then. Let’s take a look at the most significant changes in Delhi Rent Control Act 1958

Delhi Rent Control Act 1958

The Delhi Rent Control Act, 1958 (DRCA) is a law that regulates rents and evictions in certain parts of Delhi, India. Its main purpose is to protect tenants from unreasonable rent increases and evictions.

Here’s a summary of some key points of the DRCA:

• Rent Control: Landlords cannot charge more than the “standard rent” for a property, which is determined by the Act.
• Eviction Protection: Tenants who pay rent on time and follow the terms of their lease agreement generally cannot be evicted. However, there are some exceptions, such as if the landlord needs the property for personal use.

Increase in Rent: Landlords can increase the rent under certain circumstances, but they must follow specific procedures outlined in the Act.

Delhi Rent Control Act 1995

The first amendment in Delhi Rent Act started off in 1988, with Delhi Rent Control (Amendment) Act. According to section 3(c) of the Delhi Rent Act 1995, the premises with monthly rents exceeding ₹ 3,500/- wouldn’t fall under the previous rent act of 1958. 

With the latest amendments in Delhi Rent Control Act, Eviction laws were regulated. The tenants acquired rights toward the property and the latest amendments didn’t affect the rights the tenants already enjoyed with the Delhi rent Control Act 1958.

With respect to Section 14, Delhi Rent Control Act, landlords were barred from taking legal action against a tenant on grounds of illegal possession if the lease had expired and the tenant still occupied the premises.

Delhi Rent Control Act 2016

In March 2016, there was widespread concern about landlords evicting tenants on grounds of a special provision in the Delhi Rent Control Act 1958. 

There was a demand for defining comparative hardship in the act, removal of summary procedure for the state of Delhi and one particular landlord not being entitled to file a bonafide eviction for more than one property under their name in the same city.

The aggregated parties demanded a change in the Model Tenancy Act to provide the same benefits to commercial tenants as it provided to residential tenants. However, the demands couldn’t take the shape of an amendment.

Key Provisions For Tenants And Landlords Under The Rent Control Act Delhi

There are many landlord rights as well as tenant rights in Delhi as provided by the Delhi Rent Control Act of 1958, under the Delhi Tenancy Act. These include:

• The tenant must pay the rent by the 15^th of every month in case there is nothing written in the rent contract. The tenant also has the right to ask for a receipt in writing in exchange for the rent.
• The landlord doesn’t have any grounds for eviction under the Delhi Rent Control Act if the rent is being paid in a timely manner. 
• If the tenant pays a ‘standard’ rent amount under the act, the landlord cannot evict the tenant for paying the negligible amount – a key reason why yields on rent in the central part of Delhi is quite low.
• The landlord is not allowed to increase the ‘standard’ rent, however, for renovations, the increase cannot be more than 7.5% of the overall expense incurred. The Delhi Rent Control Act establishes the Rent Controller as the key figure in the dispute settlement mechanism between landlords and tenants.

Delhi Rent Control Act: 2020

With the Model Tenancy Act, 2019, Delhi Rent Act 1958 was amended to formulate Delhi rent Control act 2020. This is the latest amendment to Delhi Rent Control Act. The rights of the tenants and landlords were revisited and detailed again. 

To maintain the entire real estate system and maintain a positive relationship between the tenants and landlords, registration and forming a contract became compulsory. The tenant will receive a copy by right and another copy should be sent out to the rent control authority. The authority is responsible for maintaining the records for the rent and duration of the tenancy. 

In case of expiration of the set period of tenancy, it will be considered renewed on a month-to-month basis with the same terms and conditions. According to Section 22, Delhi Rent Act, 2020, a tenant will remain a tenant by law under these circumstances and will be liable for rent contribution towards the property. 

Delhi Rent Control Act 2020 also saw a capping on the high limit of security fees demanded by the landlord against rented properties. In cases of commercial properties, a maximum of 2 months’ rent can be demanded as a security deposit. For non-residential property, a maximum of 1-month rent can be demanded as the security deposit.

The Potential Repeal Of the Delhi Rent Control Act

Due to the several challenges mentioned above and also covered in detail in the section below, the central government was reported in 2021 to potentially repeal the DRCA and replace it with a new rental act for the country’s capital city, similar to the approved Model Tenancy Act. Let us understand why.

Delhi Rent Control Act: Challenges

A lot of rules and regulations from the Delhi Rent Act are redundant in current times and pose a lot of challenges for landlords and, in some cases, tenants. The tenants are aware of the protections and rights provided to them through the act and its various amendments. There are instances where tenants refrain from building their own house just to enjoy the benefits of living on rented premises. 

Delhi was known for its architectural brilliance and the various monuments and buildings that adorned the city’s limits. However, the current situation is very different. Commercial and residential properties in Delhi yearn for their owners’ attention. The owners have almost given up on running a real estate business because of the redundant laws. For instance, based on the Delhi rent control act bare act, the landlord is entitled to increase the rent every three years. However, the increase in the base rate is so insignificant that the owners have lost all hopes of maintaining the property. This has resulted in a poor quality of residential and commercial properties in Delhi’s real estate market.

Sometimes, the irregularities in code can be confusing and it has led to many court cases, some of which have gone out to be landmark cases for the Delhi Rent Control Act 1958. According to the landlords, Delhi Rent Control Act- Challenges are:

1. Setting Rent
2. Evicting Tenant from own property
3. High Maintenance and low profits 

Let’s browse through the most prominent reason for these petitions and what made these cases so special.

Petitions on Delhi Rent Control Act

The most significant reason for petitions against the Delhi rent Control Act 1958 is setting the standard rate, which is trivial considering the location. The archaic laws framed in 1958 favour the tenants. However, under certain circumstances, the landlord is allowed to evict. These circumstances are highly debatable and have faced a lot of petitions for amendment. The Transfer of Property act also provides a major loophole in Delhi Rent Act. Since 1958, the Delhi Rent Act has been amended and the change came after certain landmark cases made the judiciary rake its brain for years. According to the latest judgments on the Delhi Rent control act, the Delhi Rent Act, 1958 was amended in 2020. Some of the landmark cases to affect the original framework are:

Delhi Rent Control Act: Landmark cases

• Freddy Fernandes v. P. L. Mehra, 1973 R.C.R. 53(2)
• Ram Narain v. Lakshmi Dass Kundra, AIR 1971 Delhi 268 
• Madan Lal vs Hema Wati, ILR 1970 Delhi 519
• V. Dhanapal Chettiar v. Yesodai Ammal, AIR 1979 SC 1745
• Priya Bala Ghosh v. B.L. Singhania, AIR 1992 SC 639

Bonafide Requirement of Landlord Under Delhi Rent Control Act

According to Section 14, Delhi Rent Control Act 1958: Eviction of Tenants 

The landlord has no right to evict a tenant without valid grounds for eviction. If a landlord wants to evict a tenant, he needs to file a case with the Controller Authority if one or more of the following grounds are met:

1. The tenant fails to produce rent even after two months of the notice for arrears was delivered to them. 
2. Sub-letting the premises without the discretion of the landlord. 
3. The premise is a residential property and neither the tenant nor their dependents are residing in the premises for 6 months or more. A Notice for recovery of possession is required to be delivered to the tenant in such cases. If the premises remain vacant for 6 months or more, the landlord can file for eviction. 
4. If the landlord doesn’t possess any other suitable residential space, the place becomes Bonafide Requirement Of Landlord under Delhi Rent Control Act.
5. Violating terms of residential tenancy with commercial tenancy or vice versa. 
6. The property is a safety hazard and the landlord has a bona fide requirement for repairs that can’t be made while the property is being rented.
7. If the landlord has a bona fide requirement for alteration or addition to the premises. 
8. The premises were a part of a service agreement and the service ceased to sustain.

Latest Updates on Delhi Trent Control Act

The Model Tenancy Act was approved by the Union Cabinet in June 2021, and the states were invited to enact it. The Delhi Rent Control Laws, 1958 will be repealed by the government, and the new rent act will take effect. Since land is a crucial issue in the national capital, the centre must enact the law in Delhi. The traditional lease agreements between renters and landlords would not be affected by the new law.

Buying or renting a flat is anyway a cumbersome process. In cities like Delhi, the Delhi rent control act makes it even more difficult to find the best property for renting or buying. NoBroker has an innovative solution. You can buy or rent from a range of exclusive up-and-coming properties with NoBroker and save big on Brokerage and other hidden charges. Let the experts at NoBroker take care of all your real estate needs. Drop a comment under this blog and our executive team will get in touch with you, or click on the link below to get legal help with Rent control in delhi.  

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