Thumbs-up for tenants

MUMBAI, March 5: The state government has for the first time distinguished between cash-rich commercial tenants and the old, ordinary res...

MUMBAI, March 5: The state government has for the first time distinguished between cash-rich commercial tenants and the old, ordinary resident of Mumbai in an ordinance amending the Bombay Rent Control Act signed by Governor Dr P C Alexander today.

The ordinance, long overdue, has excluded large commercial establishments with a paid-up capital of over Rs 1 crore 8211; like nationalised banks, public sector undertakings, foreign embassies and the Life Insurance Corporation 8211; from the protection offered by the act by allowing landlords of such buildings to collect rent as per market rates. It has also removed both residential and commercial buildings built after September 1, 1987, from the act8217;s purview and has subjected these to market forces as well.

The decision to promulgate the act, scheduled to lapse on March 31, 2000, was taken by the state Cabinet on Thursday. The ordinance, which is yet to be signed by President K R Narayanan, is effective till March 31, 1999.

Referring to the two categories ofbuildings exempted from the act, Minister of State for Housing Raj Purohit said today, 8220;The provisions of the Transfer of Property Act will be applicable to such tenants and they will henceforth not be protected by the Rent Act. The new rent will also be decided by both the owner and the tenant.8221;

The act has also allowed transfer of tenancy to the legal heir in the case of death of the original tenant in buildings protected by the act. It has also legalised the pugree system.

Further curbing the powers of landlords, the government has decreed that tenants will henceforth not require the permission of landlords to carry out minor repairs in their premises or to procure a water connection.

The ordinance comes only days before the state files an affidavit regarding its stand on the proposed new rent control legislation, before the Supreme Court on March 9. The court has sought the affidavit on a petition filed by landlords urging it to scrap the interim Rent Control Act amended last year, which raisedrents by five per cent.

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Addressing a press conference today, Purohit said the five-per cent increase in rent would continue. About minor repairs, he said: 8220;Earlier, a no-objection certificate was mandatory from landlords for minor structural changes. However, landlords would trouble tenants even for essential repairs like the collapse of a ceiling.8221;

He added that tenants will not have to worry about transfer of tenancy to legal heirs. 8220;The landlord will have to issue a tenancy receipt to the legal heir of the original tenant if the latter passes away. If the landlord fails to do so, a cognizable offence will be registered against him and he will be sentenced to simple imprisonment for a period of maximum six months. Also, if the landlord delays issuing the receipt, he will be fined Rs 100 per day till it is done,8221; the minister said.

Sections 18 and 19 of the act, which prohibited landlords from demanding and accepting pugree and a tenant from paying the same, have been repealed. 8220;This means thepugree system has been legalised. Owners and tenants can now amicably decide the amount. This was a long-pending demand of tenants,8221; Purohit said.

He added that the Joint Select Committee of the state Legislature was about to finalise the new Rent Act as directed by the Supreme Court in 1997. 8220;Once the new act is ready, the interim act will cease to exist. The government, however, is taking care to see that no injustice is done to tenants in the new act,8221; Purohit said.