What are the rights of a tenant in a Pagdi system

Numerous micro-markets of Mumbai, Kolkata, and Delhi practice the Pagdi system and it has been predicted that over 7.5 lakh homes in Mumbai are under the Pagdi system. Let me familiarise you with what are the rules for inheriting tenancy rights under the pagdi system.

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Section 7 (15) (d) of the Maharashtra Rent Control Act, 1999, states that:

• A tenant’s family member who has been living with the dead tenant at the time of his/her death shall be eligible first from the family as the successor to succeed the tenancy. 

• Upon the demise of a current pagdi tenant, the tenancy rights can only be transferred to that legal heir(s). 

• The new tenant (legal heir) can request the landlord to issue a fresh rent receipt in the heir(s) name(s). 

But testamentary succession is not possible, as

pagdi system inheritance

rights are peculiar to the tenant and therefore a tenant cannot bestow his/her tenancy rights under a Will. 

• It is a legalised form of tenancy under the provisions of the Maharashtra Rent Control Act, 1999. 

• According to

  Section 56 of the Rent Control Act, 1999

  , the consideration paid to the landlord as a fine, premium, or consideration (

  Pagdi

  ) was legalised. 

• Lower rents than the current market rates in major metropolitan cities Mumbai and Delhi.

• The tenant can be a co-owner of the premises but not of the land.

• Transferable tenancy to family, with conditions. Tenant’s family member who has been living with the deceased tenant at the time of his/her death shall qualify first from the family as the successor to succeed the tenancy.

• In case of redevelopment, the tenant can be a co-promoter.

• Although legalised, this system has many drawbacks for the owner as well as the tenants.    

• The tenant can be a co-owner of the premises but not of the land.

• Owners get the lump-sum premiums but over the period of time, the ratio goes disproportion.

• Rents are very low for the premises in the prime locations of the metropolises.

• Lower rentals do not incentivize the landlords enough for maintenance. So the tenants have to spend from their own pockets for the renovations and repairs of the premises.

Since the Pagdi System is an age-old Owner-Tenant relationship, the tenants can not sell the properties. The Pagdi rights can be transferred to new tenants. 

The landlord can not seek eviction from his tenant by his will or choice but in case of any default, the landlord can demand for eviction, for instance, in the case of failure of rent.

I hope I have made it clear about

what happens to a pagdi tenancy agreement on death of landlord in India?

Hello,

My grandfather told me about the pagdi system a few years ago so I know about the ownership rights of pagdi system tenants. Let me explain:

Maharashtra Rent Control Act, 1999 clarifies that a tenant’s family member who was staying with the deceased tenant at the time of their death is eligible first from the family as the successor for continuing the tenancy. After the present pagdi tenant dies, the tenancy rights can only be transferred to that legal heir(s) only.

The legal heir (new tenant) can ask the landlord to issue a new rent receipt in their name. But since tenancy rights are peculiar to the tenant, testamentary succession isn’t possible. Tenants can’t give their tenancy rights under a Will.

If you want to claim the tenancy rights of the deceased tenant, then you are required to show evidence that he/she was staying with the dead tenant when he died. These are the tenancy rights in pagdi system.

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I hope you like my answer on the ownership rights of pagdi system tenants.