Mumbai: ‘Tenants will have to pay higher rent or vacate premises’ | Mumbai News


The draft Model Rent Act circulated by the central government to the states, if implemented, is likely to affect around 25 lakh tenants who live mainly in 14,000 old buildings and chawls in Mumbai alone. Tenants, whose families have been residing in these structures since the past 80-100 years by paying meagre rents, could now face the prospect of shelling out market rents to their landlords, warned housing activist and urban development expert Chandrashekhar Prabhu. Nauzer K Bharucha spoke to him on the issue.
Q: How will the new Model Rent Act affect tenants protected under the Maharashtra Rent Act?
A: The proposed Act will allow landlords to levy whatever rent and increase it as they deem fit. It will apply to all tenants, tenancies and premises, and will not protect even those who in the past paid huge ‘pugree’ (a deposit which is almost equivalent to the market price of the flat) to landlords to occupy tenanted premises. Many of these tenants have paid to repair the properties over the decades.
Q: What is wrong if the landlords are permitted to increase rent?
A: The majority of the tenants living in old and dilapidated chawls in the island city belong to the lower income category. They have paid nominal rents for decades. If under the Model Act the landlord is effectively given unilateral power to increase rent, where will these people go?
These tenants, who are currently protected, must in the future either accept the increased rents or vacate the premises. Let me also point out that since the year 2002, every new tenant who signed tenancy rights with landlords in a new building or a flat in the old building kept vacant for a year are already out of the purview of the existing Rent Act and are paying market rates.
Q: What are the other clauses objected to by the tenants?
A: Section 15 of the Model Act says that if the landlord doesn’t repair the premises which have become uninhabitable, the tenant has only the option to vacate the building and hand over possession to the landlord. Strangely, nothing to compel the landlord to repair. This would mean that the building will never be repaired and result in house collapses and deaths. Section 21 (e) says the landlord can evict the tenant as and when he wishes to repair /redevelop, and the tenant has no right to a new house in lieu of tenanted premises. This clause negates the rights under Rent Act and Mhada Act. Further, Section 21 (g) says the landlord can compel the tenant to vacate even if he wishes to sell the premises. If the tenant continues to use the premises even after the order of eviction, the tenant must pay an extortionate penal rent. Under the new law, the landlord can make unilateral changes to the building without tenants’ consent.
Q: Many tenants protected under the Rent Act and who occupy sprawling flats in south Mumbai, still pay meagre rents of Rs 100 to Rs 500 a month. Why can’t their rents be increased? Isn’t this unfair to the landlords?
A: Upmarket areas such as Marine Drive have very few tenanted buildings. Most have become ownership now. In other upscale tenanted properties, let us not forget that tenants have paid the full price of the flats as pugree when they moved in decades ago.
The landlord got his share of the pugree every time the flats changed hands. Landlords, who purchased entire buildings for Rs 2 lakh to Rs 5 lakh in the 1960s and 1970s, have earned multiple times of this investment over the years. These tenants paid repair cess and contributed big amounts for repairs and increased rent at 4% per year in the last 20 years.
Q: Why has Mhada’s policy to redevelop tenanted properties in the island city not shown much results even after 25 years?
A: Because the policy is predatory in nature. Of the 19,000-odd old and dilapidated buildings in the island city, only 5,000 have been redeveloped over almost three decades. There has been a lack of trust between developers and tenants. In several cases, tenants have been left high-and-dry after their buildings were demolished, and builders stopped paying rents.

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