Chennai
If the rental agreement is not registered as per the new Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants (TNRRRLT) Act, 2017, the agreement would have no value as evidence in the event of any legal adjudication between the landlord and tenant. This is the essence of the new Act, which clearly states that no person shall, after the commencement of the Act, let or take on rent any premises except by an agreement in writing, which shall be jointly informed to the Rent Authority by the landlord and tenant in the form specified.
While the old Rent Control Act mandated registration of tenancy agreements exceeding 11 months or more than Rs 50,000 in value, the new law mandates all tenancy agreements to be registered with the Rent Authority, irrespective of the term and value of the tenancy. This is applicable to both residential and commercial tenancies, including the use of premises for educational use but not premises registered under the Factories Act, 1948.
This means that landlords who have been shielding their rent agreements against levy of stamp duty and registration fee will now have to pay cess. Moreover, even under the existing legal provision of the Indian Evidence Act, Indian Registration Act and Stamp Act, rental agreements beyond a period of 12 months are required to be registered to be admissible as evidence in legal proceedings.
“The Act clearly states that it is mandatory to register every rent agreement. Hence, failure to register with the Rent Authority in the belief that the agreement has already been registered as per the Registration Act and Stamp Act would not hold good in the event of a dispute. Hence, the lack of registration would make the agreement inadmissible in any court,” explained Advocate V Kamala Kumar of the Madras High Court.
“For that matter, in the event of lack of registration with the Rent Authority, one would not be able to take the dispute forward even in the form of a civil suit, as the agreement loses its evidentiary value,” she added.
Also, while the earlier Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, popularly known as the Rent Control Act, was skewed in favour the tenant, the new Act is said to favour the landlord. But experts in the field feel that the new Act is bound to provide faster processing of adjudication for resolution of disputes.
Earlier, in the event of a dispute, the tenant would be the first one to move the court and obtain a direction that he would not be evicted and continue to pay the same rent until the litigation ends, by which time the tenant stands to gain the most. In the earlier Act, after the period of tenancy has lapsed, the tenant was deemed to be a statutory tenant and could continue to be in possession of the rented property as an entitlement. This has now been changed under the New Tenancy Act so much so that in the event of a dispute, the tenancy would be renewed only on a month to month basis for a maximum period of 6 months.
Also, the earlier objective of avoiding whimsical eviction of tenants wherein the landlord had to prove ‘wilful default’ of the tenant in paying the rent has been done away with. Now, the tenants can be evicted if they fail to pay the rent for only two months, irrespective of whether such default is wilful or not.
If the landlord required the rented premises for his/her own purposes, the person was required to prove that such requirement was genuine. But under the New Tenancy Act, this requirement does not exist anymore.
However, mixed reactions have emerged over the appointment of Revenue officials above the rank of Deputy Collector being appointed as Rent Authority. As this means that these officials would be the first layer in the legal mechanism to resolve disputes over rental issues, many feel that lack of legal knowledge would end up being counterproductive in dealing with such disputes.
“Though Rent Authorities have been created, no trained officers have been appointed. The government should make it a point to ensure that all officers to be appointed in the position are given training by the Judicial Academy, as every aspect of tenancy deal with the law. Unless the officials possess a reasonable knowledge in law, they cannot effectively function, and the ultimate sufferers would be the landlords and tenants,” said Advocate M Radhakrishan.
But many feel that since the powers of the Rent Authority are administrative in nature such as registration of agreements, uploading it to the website (www.tenancy.tn.gov.in) and providing a Tenancy Registration number, legal knowledge is not essential.
In addition, the Rent Authority is empowered to adjudicate landlord and tenant disputes such as fix or revise the rent as per the agreement, conduct inquiry and pass suitable orders for restoration of essential services and adjudicate termination of tenancy. Hence, this move will only pave way for reducing the costs, and above all, time taken for adjudication of disputes.
However, all orders made by the Rent Authority can be appealed before the Rent Court. The final orders made by the Rent Court can be appealed before the Rent Tribunal. The order of the Rent Tribunal is final, and no appeal or revision lies over the same. In contrast, under the earlier Act, the parties could file a revision petition before the High Court against the order of the Appellate Authority.
But with the focus of New Tenancy Act revolving around simplifying and at the same time honouring the agreement made between landlord and tenant, the Act is expected to augment the potential of rental assets and quick redressal in the event of a dispute.
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