1. We have perused the draft Maharashtra Rent Control Rules, 2017 (“the Draft Rules”). At the outset, we must point out that the Draft Rules have been framed without consultation or intimation to any tenants or tenant organizations, who have a vital interest in them. It is also curious to note that the Draft Rules have been framed without any clear discernable object behind them, and with no apparent need. We would be interested in knowing at whose initiative the Draft Rules were framed.
2. In any event, we have a number of very serious objections in relation to various provisions and parts of the Draft Rules.
3. In particular, we have very serious and grave objections to the entirety of Chapter III of the Draft Rules, which we feel are entirely out of place, particularly Rule 4. In addition, Chapter III may, in the future, place a large number of tenants in a legally precarious position in view of the provision for increased rent.
4. Keeping aside our technical, procedural and legal objections to the and validity of Chapter III and which we would request you to seek legal opinion on, our objections are as follows:
5. There is no apparent practical need for Chapter III, which would serve no obvious useful purpose.
6. Section 11 of the Maharashtra Rent Control Act, 1999, already provides for substantially the same provisions as Chapter III. We have serious objections to Section 11 itself, which is arbitrary, unreasonable and unconstitutional. Our objections to Chapter III are substantially similar to our objections to Section 11, which are given below.
7. Chapter III is ultra vires Section 11, in so far as it appears to give landlords a permanent increase in rent on account of a one time expenditure by them. This is clearly contrary to the mandate of Section 11. Assuming that the interpretation of Section 11 adopted by the Government is that the increase in rent is intended to be permanent, we must draw attention to Section 11(3)(c) which provides for a scenario where the tenant carries out the work of addition alteration etc. In this scenario, the tenant is entitled to recover only the amount of expense incurred for such work from the rent. No permanent reduction in rent is contemplated. Accordingly, any permanent increase in rent for the landlord is arbitrary, discriminatory and beyond Section 11.
8. In the present circumstances and ground realities most landlords are content to allow buildings to fall into disrepair, as a way of harassing tenants in an attempt to coerce them to vacate their premises. There is practically no landlord who desires to repair his building, with most tenants having to litigate and seek other legal recourse to repair their buildings. The notion that landlords would provide special additions or provide additional amenities is absurd, when most landlords do not provide basic facilities.
9. In the few buildings where landlords co-operate and are not out to harass tenants, tenants are ready and willing to pay for repairs and amenities. Tenants are cognizant of their equitable and practical interest in their premises, and are ready and willing to contribute for repairs and the like.
10. Section 11 and Chapter III appear to apply to all buildings, including cessed buildings, which are covered under the MHADA Act for repairs and which pay a repair cess to the MRBB for repairs to their buildings. These provisions ought not to apply to cessed buildings at all.
11. The permitted increase in rent is set at 15% of the amount of expense incurred amounts to a payback period of under 7 years. The said increase is not described as temporary. A permanent 15% increase is altogether excessive and unreasonable and would result in a windfall gain to landlords.
12. Unscrupulous landlords would abuse the provisions of the rules, carrying out illusory or unnecessary repairs, or repairs at inflated costs, as a means to extort monies from tenants.
13. An apparently permanent increase in rent in this manner would render tenants vulnerable to losing protection of the Rent Act should a future amendment exempt premises having a monthly rent above a certain threshold, as has been done in other States. This may result in a grossly inequitable situation.
14. The expression “annual rental value” is vague, and open to a great deal of interpretation. In fact, large parts of Section 11 and Chapter III are vague and open to a great deal of interpretation, abuse and misuse.
15. In our view, a fair and equitable legal framework would permit tenants to repair buildings themselves and at their cost, which is, in practice, not possible at present. This may require legislative intervention, including by amendments to the MCGM Act, the DCR and other laws, which we urge the State Government to undertake. Tenants need to be legally empowered to make applications to the municipal authorities for repairs in general, and to carry out the repairs without vexatious and mala fide opposition from landlords. Section 11, at present gives the first option of repairs to landlords. However, given the equitable interest of tenants, it should be the tenants who are the given the right to repair, including when repairs are mandated by the municipal authorities as contemplated by Section 11. Only if the tenants fail to repair should the landlords be given the opportunity to carry out the repairs and recover a one time lump sum payment for the cost of repairs.
16. In view of the seriousness and drastic implications of these Draft Rules, the short time afforded to submit suggestions and objections is altogether unreasonable. Additionally, no publicity was given to the Draft Rules, with most tenants remaining in the dark as to their very existence or importance.
17. Accordingly, we request a personal hearing along with further time to consider the Draft Rules and the provisions of Section 11 and submit a detailed representation along with positive suggestions.