Area-wise rental cap for metros on the anvil

first_imgTenants may soon get to breathe a little easier. The government is mulling fixing the maximum rental rates in all pockets of various metros on the lines of circle rates. The circle rates are indicative price levels below which rate properties cannot be bought or sold in respective circles or areas.”The government is planning to come up with a new rental law for the landlords and tenants that will regulate the irrational rental hikes in the metros. It will rationalise the rentals,” a senior official at the Union ministry of urban development told Mail Today.The ministry has shortlisted seven cities – Delhi-NCR, Mumbai, Chennai, Kolkata, Bangalore, Hyderabad and Pune – where the new law is expected to kick off. “Realty prices and rentals are already overheated in these cities. There is a huge influx of people every year to these cities. (So), they need a separate rent control act,” the official said.The new law, which will be part of the proposed Model Residential Tenancy Act 2011, envisages reforms, such as scrapping the state rent control laws that impose a ceiling on rents in various housing markets .”Like the circle rate, there will be rentals for every pocket which will be updated every quarter based on the demand and supply. It will protect the tenants from unreasonable demands,” the official added. The new proposal, if it gets implemented, will mandate that landlords cannot keep their houses vacant for more than three months and where such properties are kept vacant for more than three months, the owner would have to pay double the property tax. Also, rent for the existing tenant would be frozen for 24 months and the landlord would have to intimate tenants two months prior to hiking the rent.”It will release the stock of housing available for rentals. Also, the ministry is mulling recommending tax reliefs on rental income to boost rental housing. But it will be limited to the metros,” the official added.The proposal follows a delegation of property owners from Delhi and Mumbai meeting the Union urban development minister Kamal Nath last Thursday to call for reforming the country’s archaic rental laws.”All the rental laws and Acts are old and have become archaic. There is a need for serious reform. This new rental law for metros will be useful both for landlords and tenants,” the official said. The Centre has already proposed a Model Residential Tenancy Act, which will be implemented across the country by the states. The ministry has already sent the draft to the states for consultation and feedback.”Rent control and housing are state subjects. So, the Act cannot be binding on the states. But we are forming a uniform law across the state,” the official added. The proposed Act aimed at controlling rentals however, is not an entirely new initiative. A draft Delhi Rent Act, 1995, still remains to be notified thanks to political pressure. Also, the tabling of the Delhi Rent (Amendment) Bill, 1997, is pending and awaits passage in the coming monsoon session of Parliament.For more news on India, click here.For more news on Business, click here.For more news on Movies, click here.For more news on Sports, click here.advertisementlast_img