Now, tenants demand house owners to reduce rent

In the backdrop of the Covid-19 crisis which had resulted in job losses and pay cuts, many tenants are now demanding house owners to revise their leave and license

In the backdrop of the Covid-19 crisis which had resulted in job losses and pay cuts, many tenants are now demanding house owners to revise their leave and license agreements in favour of lower rentals.

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This year, forget the annual increase in rentals, the existing tenants and house owners are back on the negotiation table discussing the lowering of rents.

According to Ashutosh Verma, who is a senior executive in a multinational firm, a 30% pay cut in his May salary has disrupted his monthly budget.

“It is a very insecure job market and I am forced to cut down on expenses. I will shift to another place if the rent in which I am currently staying is not reduced,” said Verma. Verma who has rented an apartment in a high-end gated community complex in Parel is paying Rs 1.25 lakh as rent and has asked for its reduction. Owners too have acknowledged the issue and have started the process.

Flat owner Chandramohan Sharma, who has given his 3-BHK apartment on rent at Juhu says that he is ready to reduce his rent by Rs 20,000. “I had given my apartment [on rent] for Rs 90,000 per month and now I am willing to reduce it to Rs 70,000. However, the tenant is insisting that he will not pay more than Rs 50,000 monthly,” said Sharma.

Due to the Covid-19 lockdown, companies and businessmen have suffered great losses. Many companies have reduced the salaries of their employees and have also started terminating the jobs.

Vishal Kadrekar, proprietor, Fair Value Property, a well-known brokerage firm, said that more than a dozen tenants have approached him demanding that their current agreements be revised. “Tenants are complaining that they will not be able to afford the existing rents in the current situation and hence we have opened talks with the owners,” said Kardekar. Kardekar said that this will continue throughout the year.

“Owners will have to settle for lower rents as the economic situation is bad and tenants will be very cautious on renting apartments with higher rents,” he added.

According to Liases Foras, a real estate research firm, there are at least 5.50 lakh houses in Mumbai that are put on rent. “The condition of the rental market will only worsen in the coming days especially due to job losses and salary cuts. There will be a reduction in rentals,” said Pankaj Kapoor, CEO, Liases Foras.

In Mumbai, rentals for a 1-BHK house will start from Rs 15,000, 2-BHK from Rs 25,000 onwards and 3-BHK Rs 35,000 onwards and go till Rs 1.50 lakh.