5 lakh Mumbai families likely to be hit by Rent Act amendments
The proposal is still in the preliminary stage of discussion by housing department
May 04, 2015
Source : The Economic Times (ETRealty.com)


MUMBAI: A state housing department plan to amend the Rent Control Act, which will increase rents drastically for around five lakh families living in tenanted properties in Mumbai, has created panic among residents.
TOI has learned that the proposal is still in the preliminary stage of discussion by housing department officials, but its fallout could be explosive for the BJP-led government in Maharashtra.
According to the proposal, the government plans to target families occupying bigger flats (over 862 sq ft) and commercial properties over 500 sq ft.
The proposal says landlords can for the first three years charge 50% of the market rent to people occupying houses bigger than 862 sq ft and commercial establishments bigger than 500 sq ft. After the third year, the rent could go much higher. For senior citizens, the rent could be 15% of their annual income.
Since decades, these tenants have been protected under the Rent Control Act and pay extremely low rents (a couple of hundred rupees a month), and the BJP-led government feels these families should now pay much more. Housing minister Prakash Mehta was not available for comment on Friday.
Although the proposal, if approved, could come as a big bonanza for city landlords, who feel they receive a pittance from tenants, it is likely to lead to widespread protests and agitations.
"This is simply unacceptable. This proposal will be another big disaster like the city's draft development plan," said BJP MLA Mangal Prabhat Lodha, whose Malabar Hill constituency in south Mumbai has thousands of such tenanted properties. "It will boomerang on the government and needs to be scrapped," he added.
South Mumbai Shiv Sena MP Arvind Sawant said he has so far not heard about the housing department's proposal. "If true, we will support the tenants. However, it is too early to comment."
Housing activist Chandrashekhar Prabhu, who has fought for tenants' rights for over three decades, lambasted the state government and said the plan was part of its "liberalization" agenda. "Families occupying larger flats are not necessarily wealthy. They have inherited these apartments. In many cases, several families stay in such accommodation," he said. Prabhu added the government should come clean because it will lead to large-scale eviction of middle-class families in the city.
Utsal Karani, a member of the Action Committee for Protection of Tenants' Rights, said the Rent Control Act matter is pending before a still-to-be-formed nine-judge bench of the Supreme Court. Landlords had approached the court in 1998 to challenge the standard rent provisions of the Maharashtra Rent Control Act. Karani's Action Committee is an intervener in the case. "This is nothing but a land grab of tenanted properties," said Karani. He added the state government cannot push such a proposal without consulting all stakeholders.
Landlords, on the other hand, say the pittance they receive as rent is not sufficient to repair and maintain their properties. But housing experts said most landlords had themselves bought these buildings for a pittance (a few lakhs of rupees decades ago). "Whenever a tenancy changes hands, the landlord receives a sufficient chunk of the sale amount," said Prabhu.
In 2011, a proposed legislation drafted by the Centre to bring paltry old rentals on par with market rates had similarly created a stir. Prepared by the Union housing ministry, the draft Model Residential Tenancy Act, 2011, wanted to replace antiquated rent control legislations that cap rents. Widespread protests led the government to drop it.

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