Personal Finance

What can house owners and tenants do to resolve issues?

Meera Siva | Updated on February 17, 2020

There are better ways than legal route for landlords to handle disputes with tenants

If there is one relation that is possibly as vilified as that of the mother-in-law, it is the one between a tenant and the house owner. For the landlord, the hassles of finding a tenant, dealing with agents, fixing issues in the house and ensuring things run smooth is, of course, stressful.

With rental yields not much, it may not be worth all the hassles. For tenants, the apathy of the house owner towards critical issues causes resentment.

Many owners choose to lock up the house rather than rent it out — data from the Ministry of Housing and Urban Poverty Alleviation show that there are 2.25 million vacant houses in Maharashtra alone, even as there is an acute shortage of houses in the State . Regulations such as the Draft Model Tenancy Act 2019 are looking at smoothing out the landlord-tenant relation and helping make rental housing an attractive option.

While that is being worked on, what can owners and tenants do to resolve the issues?

Issues landlords face

The issues house owners face are wide-ranging. The common situations include the tenant not paying rent for months together or is late in payments.

Creating disturbances to neighbours or disobeying rules laid out by the housing society are some other problems. Improper maintenance of the house, sub-letting without the owner’s permission are also common. There are also instances where a residential premise is used for running a business.

Such issues usually escalate when the tenant is asked to vacate the premises.

Problems tenants face

One issue that creates a hassle is when the house owner wants the premises back after the tenant incurs expenditure such as agent fee. For example, though most agreements are for 11 months, tenants may expect to live in the premises for three-four years and may spend on certain things such as customisation.

If asked to leave early, tenants suffer losses and face trouble in finding another place, says Vijay Kumar, an advocate who specialises in RERA-related cases.

There are owners who do not do basic repair such as fixing plumbing or electrical issues. The tenant may be forced to pay for it themselves and the owner may dispute the amount. There may also be frequent rent escalation, say 10 per cent every 11 months. Another common issue is owners refusing to refund the deposit after the house is vacated.

Avoid disputes

If owners are sure about the requirements and are aware about the market rents, many disputes can be avoided, says Kumar. For example, tenants would likely vacate the premises after a reasonable notice is given to find alternative accommodation.

You need a detailed agreement that covers key aspects of the rights and responsibilities of both parties.

For instance, what alterations are allowed by the tenant; what procedure will be followed if the owner wants to do renovations, must be laid out.

And discussing the specific points of violations in case of a dispute will aid in quick resolutions.

Follow the right steps

The first course of action is clearly communicating and avoiding any escalation. Most cases are simple or temporary problems and can be resolved peacefully. Lawyers are only needed where the tenant is a recalcitrant defaulter and simply squats on the property, says Kumar.

The right step to follow would vary based on the nature of the occupant and the circumstances.

For example, non-payment of rent is a much easier issue to establish in court, whereas qualitative issues are harder to prove. In general, stick to the agreement terms and try mediation with the help of a neutral third party before seeking legal remedy, as it will be long-drawn.

Mistakes landlords make

One common mistake is not keeping a written record of communication such as the notice served to vacate.

Another mistake is not having the terms clearly laid out in an agreement. Expecting that the requirements said verbally would be met by the tenant is not correct .

Another step that must be avoided is cutting off essential supplies such as water in order to force the tenant to vacate. This is not allowed by law and is an offence. Also, owners often do not realise that the agreement remains valid even if the parties who entered the tenancy are no more; the heirs cannot deviate from the terms laid out.

Laws governing tenancy

As real estate is a State subject, the tenancy rules depend on the laws in the State where the property is located. For instance, in Tamil Nadu, it is governed by the Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017. This is applicable to urban areas.

The writer is an independent financial consultant

Published on February 16, 2020

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