Legal Blog: Guidelines to Reduce Landlord Tenant Litigation : Supreme Court

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Sunday, May 22, 2011

Guidelines to Reduce Landlord Tenant Litigation : Supreme Court

Justice Deepak Varma
The Supreme Court in Mohammad Ahmad v. Atma Ram Chauhan & Ors. has laid down illustrative guidelines which aim to reduce landlord - tenant disputes and to avoid unnecessary litigation arising therefrom. Justice Deepak Varma, speaking for the bench has observed as under;

21. According to our considered view majority of these cases are filed because landlords do not get reasonable rent akin to market rent, then on one ground or the other litigation is initiated. So before saying omega, we deem it our duty and obligation to fix some guidelines and norms for such type of litigation, so as to minimise landlord-tenant litigation at all levels. These are as follows:-
(i) The tenant must enhance the rent according to the terms of the agreement or at least by ten percent, after every three years and enhanced rent should then be made payable to the landlord. If the rent is too low (in comparison to market rent), having been fixed almost 20 to 25 years back then the present market rate should be worked out either on the basis of valuation report or reliable estimates of building rentals in the surrounding areas, let out on rent recently.
(ii) Apart from the rental, property tax, water tax, maintenance charges, electricity charges for the actual consumption of the tenanted premises and for common area shall be payable by the tenant only so that the landlord gets the actual rent out of which nothing would be deductible. In case there is enhancement in property tax, water tax or maintenance charges, electricity charges then the same shall also be borne by the tenant only.
(iii) The usual maintenance of the premises, except major repairs would be carried out by the tenant only and the same would not be reimbursable by the landlord.
(iv) But if any major repairs are required to be carried out then in that case only after obtaining permission from the landlord in writing, the same shall be carried out and modalities with regard to adjustment of the amount spent thereon, would have to be worked out between the parties.
(v) If present and prevalent market rent assessed and fixed between the parties is paid by the tenant then landlord shall not be entitled to bring any action for his eviction against such a tenant at least for a period of 5 years. Thus for a period of 5 years the tenant shall enjoy immunity from being evicted from the premises.
(vi) The parties shall be at liberty to get the rental fixed by the official valuer or by any other agency, having expertise in the matter.
(vii) The rent so fixed should be just, proper and adequate, keeping in mind, location, type of construction, accessibility with the main road, parking space facilities available therein etc. Care ought to be taken that it does not end up being a bonanza for the landlord.
22. These are some of the illustrative guidelines and norms but not exhaustive, which can be worked out between landlord and tenant so as to avoid unnecessary litigation in Court.

16 comments:

  1. shall we have to give notices for the tenanted shops before settlement with the tenant,as i think tenants will not agree with market rent comment

    ReplyDelete
  2. These guidelines are just illustrative in nature. We feel that the same are not practically possible, as you rightly pointed out that tenants would not agree to any enhancement of rent at the market rate.

    ReplyDelete
  3. tenants are like spiders in house they just take / eat but refuse to give anything
    for the house.
    Rakesh wadhawan
    Chandigarh
    09872000044

    ReplyDelete
    Replies
    1. FOOLS MAKE HOUSES & WISE TENANTS GRAB THEM

      Delete
  4. it is most unfortunate that the landlords are forced to accept rents which were prevalent 30-50 years ago because the courts and the ploticians beleieve that the tenants are poor and need to be protected. I think they should come in public and see what the truth is
    Rakesh
    Chandigarh

    ReplyDelete
  5. I agree with my brother Rakesh Wadhawan,when a tenant come , he becomes bagula bhkat . and ultimatly becomes owner of prop.even govt owned psu like nationalised banks and ins co like new india,united ,oriental and national are biggest grabber of tenated prop as they get hefty comm from lawyers unofficaly to go for litigation and get huge underhand money to vacate buildings m p gupta

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  6. IN OUR COUNTRY BIG FISH ALWAYS GET AWAY THAT IS WHY THERE IS ONE LAW FOR THE RICH LANDLORDS & OTHER FOR THE POOR.TENANT WHO R PAYING LESS THAN RS 3500 COMES UNDER OLD DRC ACT WERE EVICTION IS VERY DIFFICULT WERE AS THOSE WHO R PAYING ABOVE 3500 CAN EASILY BE EVICTED.

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  7. "FOOLS MAKE HOUSES & WISE TENANTS GRAB THEM" BECAUSE GOVT FOOLISH OLD POICIES & LAWS WHICH WERE BORROWED FROM BRITISHERS HAVE BECOME USELESS IN PRESENT TIMES .

    ReplyDelete
  8. THOSE LANDLORDS WHO WERE RICH 100YEARS AGO ARE PROUD OWNERS OF ATLAS CYCLE TODAY , THANKS TO INDIAN LAWS WHEREAS THOSE TENANTS WHO CAME BARE FEET LOOKING FOR SHELTER ARE PROUDLY OWNING LUXARY CARS AND BIG SHOWROOMS FANCY HOUSES , ISNT THIS FUNNY , IF GOVERNMENT OWNS A PROPERTY NOBODY CAN STAY ON IT WHEREAS OUR INDIAN GOVERNMENT CANNOT GIVE SECURITY & JUSTICE TO ITS CITIZENS FOR THERE PROPERTY AGAINST OLD TENANTS. I HAVE SEEN LANDLORDS IN SUCH BAD STATE THAT THEY DONT HAVE SCHOOL FEES FOR THERE KIDS , LEAVE ALONE COURAGE TO FIGHT CASE AGAINST FREE STAYING RICH TENANTS. THIS FREE STAY OF 100YEARS MADE THESE TENANTS RICH AND THE RICH LANDLORDS POOR OVER 100YEARS. I AM ONE SUCH EXAMPLE .

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  9. please help me with any case law which defines the term "common area" and what comes under common area. is there any case law on that?

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  10. it is good for landlord to revaluate their rent who wants to re-agreement after long time

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  11. Is there any law or case where landloards can increase rent of their old tenants

    ReplyDelete
  12. Transworld property has started out for allowing the best commercial residence in Gurgoan.All that an individual needs to spend money smartly in property.

    ReplyDelete

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