This article is written by Gunjeeta Jangra in 1st Semester at the National Law Institute University, Bhopal.
ABSTRACT
One of the important aspects of the real estate industry is the tenancy or renting of the vacant premises or apartments. In India, each state and union territory has enacted its rental act which governs the tenancy or rental affairs in its jurisdiction on the lines of the Rent Control Act, 1948 which primarily provides for the rights of the tenants and landlords. One of the rights of the tenants is the right to enjoy amenities which are the basic essential services required by any individual like water, electricity supply, security etc. Recently, in 2021, the Indian government enacted the Model Tenancy Act which also includes the right to enjoy amenities to the tenants and contains legal provisions if the landlords discontinue the same. This research article discusses the right of tenants to enjoy amenities, legal provisions around the discontinuity of these essential services and the implications of such actions.
Keywords: real estate, tenancy, amenities, tenants, landlords, essential services, withhold, discontinue, rent control act, model tenancy act.
INTRODUCTION
Real Estate Sector is growing at a good pace and among its various aspects, one is the renting or tenancy of vacant premises. When people look for rental apartments, they generally inquire about many things to make a final decision, such as locality, neighborhood and culture, parking facilities, the security level of the place, parks or swimming pools, nearby education or medical facilities, condition of the rental space etc. Some of these essential basic needs of tenants such as the renovating aspect, water/ electricity supply, and condition of various other things such as furniture, gas pipes, and lifts/staircase, which are provided by and one of the legal obligations of the landlords and the property managers of the rental apartment.
Some landlords do not provide sufficient or sometimes withhold the amenities to the tenants which affects the tenant adversely as it has a direct impact on the overall quality of life of the tenant. Across the globe, there are various real estate laws which govern the sector and the rental laws deal with the renting of the apartments, including the rights and obligations of the tenants and landlords and legal recourse in case of any conflict between the tenant and landlord/property manager.
This research article aims to reflect upon the significance of basic amenities to tenants, the rights and obligations of tenants and landlords, legal provisions under the Indian Rental Laws and the implications of landlords discontinuing the amenities. Section II of the research article highlights the significance of amenities for tenants and rental property’s value. Section III highlights the possible consequences of the discontinuity of the amenities by the landlords. Section IV discusses briefly the right of the tenants to enjoy amenities. Section V discusses the legal recourse in India under the recent Model Tenancy Act, 2021 if the landlords withhold the essential services enjoyed by the tenants.
SIGNIFICANCE OF AMENITIES FOR TENANTS
Amenities play a big role in attracting the tenants to any rental apartment as it has a direct effect on their overall quality of lifestyle. It is not only a space which the tenants require to live but various basic essentials are needed to live a healthy lifestyle. For instance, nearby parks or community halls will reduce the stress level of tenants as they would be able to interact with others contributing to their societal relationships. Moreover, having basic needs fulfilled while living in a rental apartment increases the overall well-being and sense of comfort for the tenants and hence, consequently leads to prolonged retention rates of tenants. The proper availability of amenities also contributes towards the overall market valuation and competitiveness of the rental property.
IMPLICATION & CONSEQUENCES IF LANDLORDS DISCONTINUE OR WITHHOLD AMENITIES
- Breach of the Lease/Tenancy/Rental Agreement
If the tenant and landlord had signed a legal agreement before the tenant enters the rental property which explicitly includes the provision for the amenities to be provided to the tenant, then this would cause a breach of terms of the agreement on the part of the landlord and the tenant can take legal action as per the rental laws applicable in the jurisdiction.
- Violation of Inhabitability
There are various roles and responsibilities of tenants and landlords pertaining to carrying out certain repairs and renovations in the rental apartments. If it was the duty of the landlord but he does not carry out even after being called in writing by the tenant which makes the premise uninhabitable without further repairs, the tenant will have the right to abandon after a fifteen days notice to the landlord in writing as per the Model Tenancy Act, 2021.[1]
- Impact on Tenants of Such Actions
When essential services are withheld by the landlords, it directly has an impact on the daily lifestyle of the tenants enjoying them. Such actions of discontinuity in the services reduce tenant satisfaction and often lead to decreasing tenant retention rate. Moreover, it discourages the tenants from renewing their lease and continuing to live in that rental premise.
- Impact on Financial Sustainability of Rental Properties
Withholding or discontinuing the essential services by the landlords impacts the overall financial sustainability of the rental properties, property valuation, and indirectly the rental income generated by them as the amenities add to the value and increase the competitiveness of the rental properties. This not only discourages the tenants as discussed, but the landlords also financially and economically.
RIGHT OF TENANTS AND OBLIGATION OF LANDLORDS
The tenants and landlords possess various rights along with some obligations under Indian rental laws for instance, the tenant needs to pay rent and other payable amounts agreed in the rental agreement for which the landlord or the property manager needs to provide a signed receipt to the tenant acknowledging the same. Among other rights, the tenants under the Indian Rental Laws have the right to enjoy and landlords have an obligation to provide basic amenities i.e. essential services or supplies such as the supply of water, electricity, piped cooking gas supply, lights in passages, lifts and on the staircase, conservancy, parking, communication links, sanitary services and security fixtures and features as mentioned in the explanation to Section 20 of The Model Tenancy Act, 2021.[2] The Rent Control Act, 1948 which is the governing law for the rent control, and protects the rights of tenants and landlords in India also grants the right to basic amenities to the tenants even if the tenant fails to pay the rent with regard to the same or the different property.[3]
LEGAL RECOURSE FOR TENANTS IF LANDLORD DISCONTINUES OR WITHHOLDS AMENITIES
PROCEDURE IN THE MODEL TENANCY ACT 2021
The Indian Government in 2021 passed The Model Tenancy Act which provides for the provision of establishing a three-tier quasi-judicial dispute adjudication mechanism consisting of (i) Rent Authority; (ii) Rent Court; and (iii) Rent Tribunal for the matters concerning the provisions of the Act.[4] It is also pertinent to note that States or Union Territories are not mandated to implement the 2021 Act and it is at the discretion of the States and Union Territories whether they want to adopt the new act or amend their existing rental laws which are based on Rent Control Act, 1948.
Section 20(1) of the Model Tenancy Act obligates the landlord to provide the basic essential services to the tenants and states that “No landlord or property manager shall, either by himself or through any other person, withhold any essential supply or service in the premises occupied by the tenant.”[5] Therefore, the landlords or the property managers cannot withhold or discontinue the basic amenities/ essential services which are utilised by the tenants at their rental premises.
If there is any contravention to this obligation, that is, the landlord discontinues or withholds the amenities, the tenant needs to make an application to the Rental Authority which, on examining the issue, may direct the landlord or the property manager to restore the essential services, via the interim order.[6] Within one month of such application, the Rental Authority will complete the inquiry with respect to the application.[7] Consequently, after hearing both parties, the Rental authority may award compensation to the tenant which cannot exceed two months’ rent, for the loss suffered by the tenant due to withholding of the essential services by the landlord.[8] Moreover, if the complaint by the tenant is found frivolous or vexatious, the Rent Authority may levy a penalty of a sum not exceeding twice the monthly rent to the tenant.[9] But it needs to be mentioned that the Tenancy Agreement needs to be signed beforehand by the tenant and landlord in order to invoke the legal provisions regarding basic amenities.
CONCLUSION
When it comes to seeking an apartment for rent-based occupancy, people often check for several basic essential needs such as electricity/ water availability, neighbourhood, nearby parks, grounds, education, and medical facilities, with the rental property. Amenities play a very important role in attracting the tenants as they affect their overall lifestyle and well-being, and deciding the overall financial sustainability and market values of the property. In India, there are separate rental laws of the states and union territories which govern within their jurisdiction, based on the Rent Control Act, 1948. Recently, the Indian government in 2021 released the Model Tenancy Act. Both acts protect the rights of tenants and the landlords. Under the Indian rental laws, tenants have the right to access and landlords have the obligation to provide amenities i.e. essential services. The landlord cannot withhold or discontinue these essential services or supplies even when the tenant fails to pay the rent, as these are the basic needs which can cause quite an inconvenience to the tenants. According to Model Tenancy Act, if the landlord discontinues the essential services, the tenant is entitled to compensation.
[1] S. 14(5), The Model Tenancy Act, 2021.
[2] S. 20, The Model Tenancy Act, 2021.
[3] Rent Control Act – Rental Agreement, Rights of Tenant & Landlord, cleartax, https://cleartax.in/s/rent-control-act, last seen on 23/05/2023.
[4] The Model Tenancy Act, 2021, PRS Legislative Research, available at https://prsindia.org/billtrack/the-model-tenancy-act-2021?search-box=127045, last seen on 23/05/2023.
[5] S. 20(1), The Model Tenancy Act, 2021.
[6] S. 20(2), The Model Tenancy Act, 2021.
[7] S. 20(3), The Model Tenancy Act, 2021.
[8] S. 20(4), The Model Tenancy Act, 2021.
[9] S. 20(5), The Model Tenancy Act, 2021.
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