Law shields tenant when advance paid exceeds rent due
A Subramani
The small causes court in Chennai did not invent anything when it said landlords could not collect more than one month's rent as advance from tenants, for it is specifically stated in law and has been reiterated by the Supreme Court in several rulings.
Advance, premium or caution deposit -call it what you will -cannot claim and collect anything exceeding one-month rent, says Section 7(2)(a) of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960. The Act does not have any penal clause for a landlord collecting more than one month's rent as advance, but makes it clear a tenant can insist on deducting his rent from the advance he paid more than one month's rent.
For instance, if a tenant paid six months' rent as advance and defaulted on paying rent from second month onwards, then the landlord cannot complain of default. The only way left for him would be to deduct the rent from the `excess' advance. “The law will protect the tenants,“ senior advocate and former additional solicitorgeneral of India P Wilson told TOI.
Interestingly, newlybuilt residential and commercial structures are exempted from the law. “It will be applicable to buildings which are at least five years old,“ he said.
What then is fair rent, according to law? A fair rent, according to Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, is 9% of the gross valuereturn of the property in case of residential buildings, and 12% gross value of the property for non-residential buildings. Rent could vary marginally depending on the location of the property , cost of the building and amenities.
Chennai has seven rent control courts that will, based on application from either of the parties, fix a fair rent for any property within their jurisdiction. Rent controllerscourts hear both sides, and, if needed, depute advocate commissioners to study the building and file a report in court. In Chennai, it takes about two years for the first round of litigation to be completed and another year or two for the appeal proceedings to come to an end.
Experts concede that evicting tenants has become a frustratingly lengthy process, forcing people to look for extra-statutory remedies such as employing musclemen or exerting political pressure to get the job done.
