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.
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.
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.
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.
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.