For all those who are renting out a house in Bengaluru, coughing up the advance is a huge task as most landlords ask for 10-months rent as the deposit. Now, the Central Government’s draft of model Tenancy Act is set to change all that. The draft proposes capping of security deposit to two months’ rent and heavy penalties for tenants who overstay.
BM spoke to a few tenants, property owners and brokers to know how this would make an impact if implemented. Sonia Dutta Gupta, a tenant, says the Act should be made applicable in Bengaluru. “If it does and the laws are stringent, it would be great. People assume that as Bengaluru is an IT city, everyone earns well but that is not the case. I have been looking for a house and when I find a good one in budget, I am unable to take it on rent as the security deposit runs into a lakh. It takes lot of time to find a house,” she says.
Another resident Sonal Agarwal who recently moved into the city says she was searching for houses in the city but found the security deposits to be too high. “I saw a small old house and the owner said the rent would Rs 6,000 but the deposit would be a lakh.
When I told him about a Supreme Court order that deposit should not be more than three months’ rent, he smiled and said who follows SC rules,” she says. Rohit Manmohan, a techie from Kerala, also looked into the possibility of renting a house when he moved to the city in October last year. “But the owners asked me Rs 60,000 as security deposit. Later, I had to settle in a budget paying guest facility in the Kodihalli. Many of my friends did the same due to high security deposit. The new law proposed by the Central Government is welcome.”
A house owner says if this is implemented, it would be a huge relief. “Buying a property is a kind of an investment. In case of loss of job, we can at least depend on the rent from the property,” says a school teacher who has been fighting a case against her tenant for four years.
“We rented out the property in 2013 and he used to pay the rent but not on time. Since 2015, he hasn’t been paying the rent and is not vacating the house. If this Tenancy Act is implemented, it can save time for us. Now, our the court hearings are going on and it takes years for a final verdict,” she says. Ritikh Narayanan, a real estate broker in Koramangalasays, “If such a law is implemented our commission will be reduced to 15 to 20%. Currently, we charge around one month’s rent as commission.”
C V Sudhindra, a senior high court advocate, says different states have got different tenancy laws. “We need to see whether the tenancy act contemplated by Centre is only applicable to only a class of tenants as it is now according to tenancy laws prevailing in different states or is it applicable to all lessee or lessor, landlord and the tenant, not withstanding the size of the land or the size of the building.
If implemented, the Act will have direct impact on one’s right to property as you cannot put an embargo on the enjoyment of the property by bringing out tenancy law when an individual is buying a property by paying a huge market value,” he said.
