SC drafts a model Landlord - Tenant agreement
If a tenant pays rent at the market rate, increases it by 10% every three years and also coughs up all other maintenance charges and taxes for the premises, then he or she could have five years of peaceful stay on the property, according to a model landlord-tenant agreement drafted by the Supreme Court. The SC’s model agreement would hold good in cases where the tenant pays every charge accrued on the house so as to enable the house owner to get the rental without any deduction. “Apart from the rentals, property tax, water tax, maintenance charges, electricity charges for the actual consumption of the tenanted premises and for common area shall be payable by the tenant only so that the landlord gets the actual rent out of which nothing should be deductible,” said Justice Dalveer Bhandari, who authored the judgment for the bench, which included Justice Deepak Verma. “In case there is enhancement in property tax, water tax or maintenance charges, electricity charges, then the same shall also be borne by the tenant only," the bench said. This judgment would not affect tenancy governed by existing lease deeds or specific contracts between landlords and tenants. The flood of tenancy disputes in courts, arising due to an absence of agreements, forced the bench to lay down the guidelines. It said adherence to the model agreement could considerably bring down the amount of litigation."If the present and prevalent market rent assessed and fixed between the parties is paid by the tenant, then the landlord shall not be entitled to bring any action for his eviction against such a tenant at least for a period of five years. Thus, for five years the tenant shall enjoy immunity from being evicted from the premises," the court said. The court found that tenants were occupying property by paying rent at a rate determined 20 to 25 years back and said that half the landlord-tenant disputes would not have reached the courts if the tenants agreed to pay rent at the market rate. It said: "The tenant must enhance the rent according to the terms of the agreement or at least by 10% after every three years.” The rent should be determined either on the basis of a valuation report or reliable estimates of building rentals in surrounding areas let out recently, said Justice Bhandari. "The rent should be just, proper and adequate and be fixed keeping in mind the location of the property, type of construction, accessibility with the main road, availability of parking space. Care should be taken that it does not end up being a bonanza for the landlord,” the apex court said. Minor repairs of the premises would be carried out by the tenant from his own pocket and he could not undertake any major repairs, requiring reimbursement, without prior permission from the landlord, the bench said.