Simply put, Yes, it is legal to raise rent every year in India but not like the landlord can increase the rent without you even knowing it. It doesn’t work like that. And if something like this happens to you, there are laws that can protect you from this legally. Keep on reading to find out about what laws are there in place regarding rent control in India, what you can do when you are in a dispute with your landlord, and things like that. Here we go.
What’s the Deal with Rent Control Laws in India?
In India, rent control laws have been created with the objective of keeping landlords and tenants equally at ease. These laws lay down the rules like for a hike in rent, the timeline over eviction, and also the way how rental homes should be kept in good maintenance. The most popular rent control law is the Rent Control Act since its inception in 1948 and constantly retouched in every tenure by respective authorities. Almost every state in India has its own version of this act with a high probability, that the rules might differ for every state so that everyone is aware of their rights and responsibilities which serves as an equilibrium for rental agreements in the country. If you want to save tax on rent busines you can take help from George dimov business tax services.
How Rent Hikes Are Legally Handled?
The Rent Control Act regulates the increase of rent, and the Model Tenancy Act was issued in 2020 in a bid to clarify the rule and make it simpler. It was to make explicit that a landlord can’t ask for a higher rent for no reason. Individual states such as Maharashtra and Delhi write their own laws into the mix (in this case, through the Maharashtra Rent Control Act and the Delhi Rent Control Act). These additional laws often add to the rules. For instance, now in Maharashtra, the rent might increase by only up to 4 percent per annum, while in Delhi a landlord can increase the rent by 10 percent every three years, provided it fulfills certain criteria.
Rights and Responsibilities for Tenants and Landlords
Under the Rent Control Act, sure, tenants have the right to the continued residence without eviction unless the landlord can prove a valid reason, they should receive proper written notice before any eviction proceedings can start, they are entitled to water, electricity, and other essential services, which a landlord cannot cut off, even if the tenant falls behind on the rent, the rent should be reasonable and reflective of the value of the property, and they are entitled to go to court against an unfair rent hike.
Landlords aren’t left out, though. In addition to being able to legally evict tenants for real reasons (eg, if a tenant repeatedly breaks the law in the rental unit, or does significant damage to the property), landlords can also increase the rent, though it has to be done in accordance with the terms of the rental agreement as well as with rent-control laws. Though, on the landlord’s part, they must keep the property safe and livable, maintaining its structure and facilities.
How Rent Increases Really Work In India?
You see, rent increases are generally standardized to protect against random rent hikes. Generally, landlords can bump up the rent by 5% to 10% each year, depending on state laws. For example, as we mentioned, in Delhi, rent can be increased by 10 percent every three years. If a tenant moves out, the landlord can increase the rent by up to 15 percent of the amount it costs to make the necessary improvements. Also, if government taxes on the property go up, landlords can pass this cost to tenants, but the hike should match the tax increase.
Must-Have Details in Your Rental Agreement
It is important that you both have a written rental agreement, which should include every agreement between the two parties, such as what amount of rent, what date of payment, in which condition to hold the security deposit, with how much amount, for how long the tenancy, how much rent can be increased, under which circumstances you have rights to increase, how much time period remaining after vacating the property or anything like that. And yes, both parties will have to sign it, and it should be registered with local authorities.
See, in the event of a dispute between the tenant and the landlord, there are legal and effective measures to settle it. Disputes over bad eviction, unjustified rent increase, and failure in maintenance duties are some of the issues, which can be brought to Rent Control Courts, and other legal authorities. Once done, the tenant (or his relative) can go to these courts, if he feels his rights are being violated, while the landlords can also go there if they are stuck with bad tenants. The process involves filing a complaint, attending hearings, and following the court’s decision.
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