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ABSTRACT

Landlord-tenant law in Tamil Nadu governs the legal or jural connection that exists between a landlord and a tenant as long as they have a valid tenancy for the demised premises. Tamil Nadu’s primary landlord-tenant statute is the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act 2017 was enacted in accordance with the model Tenancy Act proposed by the Government of India. The Act repeals the Tamil Nadu Buildings (Lease and Rent Control) Act of 1960. Tamil Nadu is India’s most urbanized state, with an urban population of approximately 3.5 crores, representing 48.44 percent of the total population of 7.2 crores as of the 2011 census. The urban population has grown at a rate of 27.16 percent over the past decade. With the rapid pace of urbanization, one of the most pressing challenges is the availability of affordable housing in cities. According to the 2011 census, Tamil Nadu has a rental housing percentage of 23.4%.

 

INTRODUCTION

The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act 2017 was enacted by the government to facilitate landowners and tenants while also providing affordable housing for all. The aforementioned Act is effective as of February 22, 2019.The new legislation aims to regulate block tenancies in accordance with the terms and conditions of the tenancy agreement signed by the landlords and tenants, as well as to protect the landlords’ and tenants’ interests in the event of a dispute. According to the provisions of this law, all tenancy agreements must be written and registered with the Rent Authority. The registration of the tenancy agreement with the rent authority is separate from the registration requirement of the tenancy agreement under the Registration Act of 1908. Since the majority of transactions are completed through the tenancy registration portal with minimal interaction from the Rent Authority. The tenancy registration portal makes it much easier for the general public to register their tenancy agreements.

 

TAMIL NADU’S NEW TENANCY LAWS

Under the new Act, section 2 (c) defines “landlord” as

“a person who, for the time being is receiving, or is entitled to receive, the rent of any premises, whether on his own account, or on account of, or on behalf of, or for the benefit of, any other person or as a trustee, guardian or receiver of any person or who would so receive the rent or be entitled to receive the rent, if the premises were let to a tenant, and shall include his successor-in-interest;”

And section 2 (n) defines “tenant” as

“a person by whom or on whose account or behalf the rent of any premises is, or, but for a contract express or implied, would be payable for any premises and includes any person occupying the premises as a sub-tenant and also, any person continuing in possession after the termination of his tenancy whether before or after the commencement of this Act; but shall not include any person against whom any order or decree for eviction has been made;”

The concept of fair rent, which was promoted under the old TNLRC Act, has been completely eliminated. The New Tenancy Act aims to regulate rent based on the terms and conditions of the landlord-tenant agreement. The landlord and tenant are free to agree on the rent for the premises as well as any other tenancy-related terms and conditions. Thus, the transition from ‘control of rent by fixation of fair rent’ to’ regulation of rent by contractual rent’ represents a paradigm shift in the rental market. Similarly, the restrictions on the security deposit have been lifted. Previously, under the TNLRC Act, if a fair rent was fixed for the premises, the landlord could not collect more than one month’s rent as a security deposit.

The New Tenancy Act requires all tenancy agreements to be in writing and registered with the Rent Authority. This is in addition to the registration of tenancy agreements under the Indian Registration Act of 1908 (Registration Act). Non-registration of tenancy agreements has the same effect as section 49 of the Registration Act, which states that unregistered agreements do not create any lease rights over the premises in favour of the tenants and cannot be used as evidence of any transaction affecting the premises or conferring any rights. Previously, tenancy agreements for more than one year were registered with the Sub-Registrar office under section 17 of the Registration Act; tenancy agreements for less than one year were typically not registered, as they were optionally registrable under section 18 of the Registration Act. Under the New Tenancy Act, all tenancy agreements, regardless of term, must be registered with the Rent Authority, the New Tenancy Act’s regulator.

One of the primary goals of the TNLRC Act was to prevent frivolous evictions of tenants. To accomplish this, the previous law imposed stringent conditions and measures to evict tenants, and the balance shifted in favour of the tenants. This has been completely revamped under the New Tenancy Act, and the balance is restored. Previously, the landlord had to prove the tenant’s ‘willful default’ in paying the rent. The New Tenancy Act eliminated this provision. If the tenants simply fail to pay their rent for two months, they can be evicted, regardless of whether the default was willful or not. Similarly, if the landlord requires the rented premises for his own purposes, he must demonstrate that such requirement is genuine. The New Tenancy Act eliminates this requirement entirely. This move will undoubtedly reduce the cost and time required for dispute resolution.

To resolve disputes between landlords and tenants, the New Tenancy Act establishes a three-tier system:

1. Rent Authority,
2. Rent Court, and
3. Rent Tribunal.

The TNLRC Act established a two-tier system, with the Rent Controller and the Appellate Authority. The Rent Authority’s powers are administrative in nature, such as registering agreements, uploading them to the website (www.tenancy.tn.gov.in), issuing Tenancy Registration numbers (T.R.No), and so on. Furthermore, the Rent Authority has the authority to resolve landlord-tenant disputes by:

1. fixing or revising the rent in accordance with the agreement;
2. conducting an investigation and issuing appropriate orders for the restoration of essential services; and
3. Adjudicating tenancy termination, among other things.

All Rent Authority orders can be appealed to the Rent Court. The final Rent Court orders can be appealed to the Rent Tribunal. The Rent Tribunal’s order is final, and no appeal or revision is permitted. Under the TNLRC Act, the parties could file a revision petition with the High Court challenging the Appellate Authority’s decision. The New Tenancy Act prohibits such a revision provision. The New Tenancy Act assigns responsibility for premises maintenance and repairs to both the landlord and the tenant. The New Tenancy Act’s Schedule II specifies the scope of maintenance for the landlord and tenant, respectively. If the landlord fails to make repairs, the tenant may carry them out and deduct the cost from the rent. Similarly, if the tenant fails to pay the rent, the landlord may make repairs and deduct the cost from the security deposit. Previously, these rights were provided to landlords and tenants as contractual rights in tenancy agreements, but the New Tenancy Act makes them statutory rights. Furthermore, the New Tenancy Act provides statutory recognition to Property Managers, who are hired by landlords to manage and maintain rented properties.

Property Managers are responsible for:

1. collecting rents;
2. inspecting the premises;
3. performing maintenance and repairs; and
4. Issuing notices on behalf of the landlord.

 

The New Tenancy Act allows for the separation of the tenancy of vacant land from the rest of the tenanted premises/land. The landlord cannot split the tenancy and recover possession of a portion of the premises, as is a well-known principle under Indian law. The only exception to this rule is when the lessor transfers a portion of the premises in accordance with Section 109 of the Transfer of Property Act. In contrast to this general rule, the New Tenancy Act gives the landlord a statutory right to terminate the tenancy. The TNLRC Act allowed only the spouse, sons, and daughters to inherit tenancy rights. The scope of the New Tenancy Act has been expanded to include the wife of a predeceased son as well as the tenants’ parents. If the tenant fails to vacate the premises after the tenancy is terminated, the landlord is entitled to double the monthly rent as compensation under the New Tenancy Act. Furthermore, if the tenant fails to pay the rent on time, the landlord has the right to charge interest at an annual rate of 8% on the arrears. Similarly, if the landlord delays refunding the security deposit, the tenant is entitled to 8% annual interest on the arrears of the security deposit.

 

CONCLUSION

The New Tenancy Act’s central goal is to declutter and honour the landlord-tenant agreement. As a result, the New Tenancy Act’s changes will have a far-reaching impact on the rental market in India’s southeastern state. This will indeed unlock the potential of rental assets, stimulating the growth of Tamil Nadu’s real estate industry. These new changes have been implemented as society continues to modernise over time. The use of e portals and a registered agreement benefits both parties and contributes to the elimination of future tenancy disputes.

 

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Article Written By – Gnaneswarran Beemarao