Did you ever wonder how people afford housing in Mumbai? When the rich and the middle class pay high rents, how do the lower middle class and the poor manage? In a city like Mumbai where the house rents are known to be very high, the government had to step in. They formulated the Bombay Rents, Hotel and Lodging House Rates Control Act aka the Maharashtra Rent Control Act.
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What does Rent Control mean?
Rent Control is a means in which there is a limit set on the amount of rent a landlord can demand, even when the rental agreement has to be renewed. This amount is carefully arrived at by the local executive, legislative or judicial government, as the case may be.
Read: Know Your Renting Rights with the Model Tenancy Act
Why was the Maharashtra Rent Control Act Enforced?
Back in the day, during the first World War, there was a massive influx of people into the city, this included military personnel and migrants. To add to this, there were also dock workers and factory workers who were very handsomely paid for their key contributions.
The growing demand for homes, and the growing supply of money lead to landlords hiking the price of rent to capitalize on the situation. In order to ensure that rental prices were not going out of hand, a standard rent was fixed in 1915.
The Maharashtra Rent Control Act 1999
There have been many changes made to the Rent Control act since 1915, the one that is currently enforced in the state of Maharashtra is The Maharashtra Rent Control Act of 1999.
Read: Property Tax Gurgaon Online: About Property Tax in Gurugram
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In this act-
- The landlord has the right to decide and increase rent at the rate of 4% every year. This can be increased to 15% if improvements are needed and 70% if the tenant’s consent.
- The rent can be increased further to 25% if there are structural repairs needed. Also, if there is a hike in taxes, you can expect your landlord to increase the rent charged.
- To rebuild, the landlord needs to meet strict conditions set forth by the Act. This will include – raising funds, getting the building plans approved by municipal authorities, etc.
- Landlords must maintain their property. If the tenant feels it is not maintained and unfit to live in, he can serve the landlord with a notice of 15 days.
- If the tenant does the repairs, after serving the notice, they can deduct the repair expenses from the rent they pay.
- A tenant can relinquish or transfer his tenancy, this is normally done when someone offers to buy out the rest of their tenancy.
- To transfer tenancy they usually pay about 33% of the amount to the landlord to effect the transfer of tenancy.
There are plenty of other details that go into the Rent Control act, you can read about it in detail here – https://housing.maharashtra.gov.in/Sitemap/housing/pdf/actsrules/THE_MAHARASHTRA_RENT_CONTROL_ACT.pdf.
The Impact Of The New Model Tenancy Act 2021 On The Maharashtra Rent Control Act
The Model Tenancy Act was approved as well as guidelines for the same were issued to states in 2021. The new Act’s aim is to enforce an ecosystem that is not only transparent between the landlord and the tenant, but also that the disputes and litigations are minimized. The state of Maharashtra ranks among the top states with the highest number of tenants. However, this will not impact properties that are currently being rented out based on the pagdi system.
Read: Understanding Ts-bPass: Telangana’s Modern Building Permits
Read: Know Your Renting Rights with the Model Tenancy Act
If you have any questions, or thoughts on the Maharashtra Rent Control Act, drop us a comment and we will be happy to help you. If you are looking for affordable housing options in Mumbai, To Rent, or To buy, or sell, NoBroker is here to help, save on brokerage and get the home you deserve by clicking below.
FAQ’s
What is rent control?
Rent Control is a means in which there is a limit set on the amount of rent a landlord can demand, even when the rental agreement has to be renewed. This amount is carefully arrived at by the local executive, legislative or judicial government, as the case may be.
What is the Maharashtra Rent Control Act?
The Maharashtra Rent Control Act is the Act passed by the state government for regulating housing.
Read: Land Acquisition Act 2013: Balancing Demand and Compensation
When did the Maharashtra Rent Control Act come into effect?
The Act came into effect after the passing of the Maharashtra Rent Control Bill in 1999, on March 31st, 2000.
What is penalty for charging more than the standard rent set by the Act?
Charging more than the standard rent is not only illegal, but is also punishable with imprisonment of up to 3 months, or fine of up to INR 5,000, or both.
How much rent is allowed to increase under the Act?
The Act allows landlords to make an increase of 4% per annum on the rent amount.
How is tenancy transferred in child’s name if his father is legal tenant?