The effects of the Second World War spread its tentacles in the form of spiraling inflation, rising cost of living, increased population pressure in urban areas and paucity of living space. To check the upward trend in rent and unreasonable eviction of tenants,
rent control orders were issued in 1941. After regular renewals, it came into force in the Act XVII of 1960.
Rent Control Act - the ultimate paradigm
Rent control was an attempt by the government to eliminate the exploitation of tenants by landlords after the Second World War. Rent legislation tends to providing payment of fair rent to landlords and protection of tenants against eviction.
But the allowances have been very generous and hence tenants residing in properties since 1947 continue to pay rents fixed then, irrespective of inflation and the realty boom.
The Rent Control Act has led to several adverse situations like languishing investment in rental housing, withdrawing of existing housing stock from the rental market, stagnating municipal property tax revenue.
The rent control along with security of tenure has not given any encouragement to house owners to renovation their houses and most houses as a result have a worn out look Repeal of the Rent Control would lead to construction boom and meet the growing need for housing and aid employment generation. There will be more rational use of prime locations and will set off a continuous process of urban renewal.
Rental housing has the scope for forging backward and forward linkages with many other industries, it is instrumental in stabilizing real estate prices and checks unwanted speculation and creation of slums.
In 1992, the Central Government proposed a model rent control legislation, which was meant for and circulated to all states. The model Act proposed modification of some of the existing provisions on inheritance of tenancy and also prescribed a rent level beyond which rent control could not apply. The New Delhi Rent Control Act that was passed in 1997 was based on this but failed to be notified due to resistance from traders who are sitting tenants. Very few states have introduced the model Act.
The new Maharashtra Rent Control Act, Delhi Rent Control Act, The Punjab Rent Act, 1949, National Housing Policy all has provisions for the dispute among the landlords and tenants. Each of the State Rent Act provides for fixation of Standard Rent as well decree for possession and provisions that lay down the satisfaction of the Court.
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