The Model Rent Act has the power to effect a sea change in the residential and rental markets across the country, once state governments enact them as laws in their own states and Union Territories. In part 1 of my analysis I discussed the roles and responsibilities of the landlord and tenant. One of the most significant parts of this Act is that it takes rental property out of the purview of civil courts and has created its own judicial powers with the enabling provision of being able to enforce the orders similar to that of civil courts. It also has a specified timeline for justice and is expected to bring significant efficiency in the rental property space.
The Rent Authority and Rent Court or Tribunal are the two main features of this Act.
The Rent Authority will be headed by an officer not below the rank of deputy collector, to be appointed by the District Magistrate or District Collector with prior approval of the State Government or Union Territory Administration.
The Rent Authority has the powers of the Rent Court as documented in Sections 4, 9, 10, 14, 15, 19 or 20 and the procedures laid down in Sections 35 & 36 of the Model Rent Act. A person can appeal against an order of a Rent Authority to a Rent Court within 30 days of passing the order.
Register Rent Agreements
The most significant role of the Rent Authority is to register the rent agreement and provide a unique identification number. This is an important step in structuring the rental market. By making it mandatory to register rent agreements, there is now a system within which the rental markets have to function. The tenancy agreement will be uploaded on the website in the vernacular language of the state, along with the decided documents. Details of this process have not yet been disclosed in the Model Act.
Settle Rent Amounts
If a landlord upgrades a rented property, he can demand an enhanced rent one month after the completion of the renovation. In case there is any dispute about the enhanced rent, the Rent Authority can not only help determine the enhanced charges but also from when these charges become applicable.
In case the landlord does not accept rent and other charges, the amount can be sent by postal orders for two months. If the issue is not resolved even after this period, the tenant can deposit the rent and charges with the Rent Authority. Even when the tenant cannot determine whom to pay the rent to, he may pay it to the Rent Authority, which will inquire about the case and decide whom the rent has to be paid to. There is no issue held against a landlord who withdraws these amounts from the rent authority, provided it is the amount agreed upon in the Rent Agreement. All maintenance disputes and their resolution are in the purview of the Rent Authority.
Role of Property Manager
The Model Rent Act has defined the role of the property manager. If he works in contravention of the rules defined or against the instructions of the landlord, the Rent Authority can be approached. The Act says, “The Rent Authority may, on an application made to it by the landlord or tenant in that behalf, remove the property manager or impose such costs on the property manager so as to compensate any loss incurred by the landlord or tenant due to such contravention.”
Thus, the Rent Authority manages all operational issues of the Rent Act and also has basic powers of addressing disputes between the landlord and tenant in select cases and between the landlord or tenant and the property manager. All judicial functions are under the purview of the Rent Court or Rent Magistrate.
The Rent Court will be headed by an Additional Collector or Additional District Magistrate or officer of similar rank. He is to be appointed by the District Magistrate or District Collector with the approval of the State government or the Union Territory administration.
The Rent Tribunal would be a District Judge or Additional District Judge, appointed by the State or Union Territory administration in consultation with the jurisdictional High Court.
These courts will not be guided by the Code of Civil Procedure. This is an important statement in the law as this establishes the complete authority of these courts on rent issues.
One significant issue that has been addressed is the time taken to pass orders. The Rent Court or Rent Tribunal has to dispose of the case within 60 days. This is a significant improvement on the current scenario where the cases in civil courts drag on for decades.
There can be no more than three adjournments and each adjournment has to have a valid reason and a fee has to be paid for each.
Procedure in Rent Court
The entire process of functioning in the Rent Court or Tribunal has been spelt out in the Act.
- Landlord or tenant to file the application or appeal in the Rent Court or Rent Tribunal, along with an affidavit and a copy of documents, if any
- The Rent Court or Tribunal will then issue a “notice to the opposite party, accompanied by copies of application or appeal, affidavit and documents”
- The opposite party has to send a copy of the reply to the applicant and then file a reply to the court
- The applicant can file a reply to the opposite party and then file a rejoinder to the Court
- The Rent Court or Tribunal will fix a date of hearing and hold a “summary inquiry as it deems necessary”
- The Rent Court or Tribunal has a maximum of 60 days to dispose of the application or appeal
- The evidence of the witness in Rent Courts or Tribunals are filed as an affidavit. Only where it deems necessary, the witness can be called in for cross examination
- Summons are issued as per civil courts protocol
- Applications and appeals should be in the prescribed form
- The Rent Authority or Court or Tribunal will allow not more than three adjournments and the reasons will be recorded for each. The party requesting the adjournment is also required to pay a fee for each
- There is a 90-day period from the date of filing to close every application
- The only exception to this is where there is reply and/or a rejoinder as in
Section 21 Clauses c and d, which has to be cleared within 30 days Powers of the Rent Court/Tribunal
These are the same as a civil court under the Code of Civil Procedure, 1908 for:
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) issuing commissions for examination of the witnesses or documents;
(d) issuing commission for local investigation;
(e) receiving evidence on affidavits;
(f) dismissing an application or appeal for default or deciding it ex-parte;
(g) setting aside any order of dismissal of any application or appeal for default or any other order passed by it ex-parte;
(h) execution of its orders and decisions under this Act without reference to any civil court;
(i) reviewing its orders and decisions;
(j) revision of orders and decisions of Rent Authority and Rent Court and;
(k) any other matter, which may be prescribed.
The Rent Court has been deemed a civil court with powers of execution of its orders. These can only be challenged within 30 days of passing an order, in a Rent Tribunal in the same geography. The Tribunal has 30 days to serve notice, along with the copy of the order and has to dispose of the case within 60 days of serving the notice. It may allow documents during the hearings but one document can be presented only once during the hearing. Interlocutory orders are allowed and after the hearing the Tribunal can confirm, set aside or modify the orders of the Rent Court.
Execution of the Order
The Rent Court, on the basis of application filed by any party, can perform the following execution functions:
Deliver possession of the premises to the party in whose favour the order was passed
Freeze bank accounts of the opposite party to recover the dues specified in the order
Appoint the right officials from the Rent Court or the local administration to execute the order
The execution has to happen within 30 days of passing the order. Help from the local police can be provided to the applicant, only for a fee.
A law that spells out the functions to this level of detail, has a greater chance of success. Very little is left to interpretation and therefore the process can be speedily executed. The only delay is for the governments of State and Union Territories to set up the Rent Authorities, Rent Courts and Tribunals at the earliest. While the law has suggested that this should be a prospective law, some states like Uttar Pradesh have executed this as a retrospective law. It remains to be seen whether there would be operational hiccups. Maharashtra has announced that it is studying the law prior to a decision to implement.
Views expressed above are the author’s own.
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