Chandigarh’s policy pangs: Endless wait for concrete tenancy reforms continues

By, Chandigarh
May 05, 2022 02:12 AM IST

For seven years, the Chandigarh administration has been working on the overhaul of the archaic law governing tenant-landlord relations in Chandigarh while disputes multiplied and landlords became more insecure about renting out properties, further causing dearth of housing supply and pushing rents up

In a city where nearly half of the population lives in rented accommodations, which is almost double the national average for urban areas, the Chandigarh administration has failed to put in place an up-to-date and city-centric Tenancy Act.

The slow-grinding policy formulation machinery of the Chandigarh administration, which started the process for an updated Tenancy Act nearly seven years ago, has yet to effect the reforms. (HT)
The slow-grinding policy formulation machinery of the Chandigarh administration, which started the process for an updated Tenancy Act nearly seven years ago, has yet to effect the reforms. (HT)

The archaic law governing tenant-landlord relations in Chandigarh – the East Punjab Urban Rent Restriction Act 1949 – has for years been found inadequate and outdated in meeting the changing housing and business expansion needs of the city.

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The remarkably high incidence of tenants has translated into higher disputes with landlords, with most ending up in long-drawn legal battles.

This has further led to landlords avoiding renting out their properties, amid fears of losing their properties to tenants, ultimately restricting housing supply and pushing up rents.

But, the slow-grinding policy formulation machinery of the UT administration, which started the process for an updated Tenancy Act nearly seven years ago, has yet to effect the reforms.

The administration first started to work on the tenancy reforms after the central government formulated the Model Tenancy Act, 2015. But even with a model in its hands, the administration couldn’t ready a Chandigarh-specific policy for nearly four years.

It was only in mid-2019, when the administration finally came up with a draft of the Chandigarh Tenancy Act, 2019.

But while the draft was made public for suggestions, the Centre proposed a new Model Act, which was finally approved by the Union cabinet in June 2021, creating the Model Tenancy Act, 2021.

Following this, the administration decided to adopt the Model Tenancy Act, 2021, and in February this year, sent the proposed Chandigarh Tenancy Act, 2022, to the Union government for approval and enactment.

“Land and tenancy are part of the State List under the Indian Constitution. Being a Union territory without a legislature and directly run by the ministry of home affairs (MHA), Chandigarh needs the nods of the Union government and the Parliament for amendment in its laws or enactment of new laws. So, with the changes in the Centre’s stand on the Model Tenancy Act, the administration’s position was also bound to change,” said a UT official.

“The Chandigarh Tenancy Act, 2022, is with the MHA and will be enacted by the Parliament. It may be taken up in the monsoon session, but so far, we haven’t received any response from the Centre,” said the official.

“Tenancy reforms will ensure a balancing act between the tenant and landlord. Currently, a large number of commercial properties are stuck in legal disputes,” said Chander Verma, president, Chandigarh Business Council.

“Speedy dispute resolution through tenancy reforms will pave the way for better availability of rental accommodations and security of ownership for landlords,” added Hitesh Puri, chairman, CRAWFED, and director, Chandigarh Housing Board.

UT estates secretary Vijay Namdeorao Zade didn’t respond to calls.

How tenancy reforms will help

Quicker disposal of landlord-tenant disputes

Clear demarcation of rights and duties of tenant and landlord

More confidence in making vacant houses available to the rental housing market.

Salient provisions of proposed Act

Setting up of a Rent Court with exclusive jurisdiction over tenancy issues, including tenant-landlord disputes that are currently taken up in civil courts

Shared responsibility of tenant and landlord for the property’s maintenance

Both can charge or deduct the amount from rent or security deposit, as the case may be, for repairs done on behalf of the other

The landlord will get compensation of double the monthly rent for two months and four-fold thereafter from a tenant who overstays

No tenant will be allowed to sublet the rented building without the landlord’s permission

The landlord cannot increase the rent within the period stated in the agreement

The tenant has to be provided a written three-month notice before revision of rent

A tenant cannot be evicted in violation of the Tenancy Act’s provisions

Security deposit will be capped at two-month rent in case of residential property; has to be a minimum of one-month rent in case of non-residential property

Receipt to be given for rent paid.

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