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Basic rights that tenants and landlords need to be aware of

When it comes to rental accommodations, there are some basic rules and rights that tenants, as well as landlords should be aware of, to avoid friction. Here’s a look at some simple, yet, commonly overlooked aspects

People who live in rental accommodations, often face disputes on minor things with their landlord. It is, therefore, essential to know what your rights as a tenant are, as well as the rights of the landlord. Both parties must respect these rights, to live in harmony.

Basic things that the landlord must provide with the property

“The most basic requirements that a landlord (licensor) ought to provide to the tenant (licensee) under the common Leave and License Agreements include:

  • Accurate details of the licensed premises, such as the size of the premises, availability of car parking area, etc.
  • Willingness and cooperation to get the leave and license agreement duly stamped and registered, at the sub-registrar’s office.
  • Uninterrupted use and occupation of the licensed premises.
  • Safety and privacy to the licensee, to use and enjoy the licensed premises.
  • Clear right, title and interest, to provide the licensee with the license to use and enjoy the licensed premises.”

Tenants should inspect the apartment for defects and make a note of them, by taking a photo to share with the landlord. They should ensure that the plumbing systems (including the water pressure), electricals fixtures and other provisions in the apartment are in a usable condition. Some tenants also request that the landlord repaint the walls, before they move into the apartment.

When should the deposit be handed over to the landlord?

“The deposit is usually an advance given by the tenant to the landlord as a security, while moving into the rented apartment. The purpose of the deposit is to protect the landlord, in case of any damages or alternatively, in the event of any non-payment by the tenant. The payment period for the deposit is usually stipulated in the agreement with the landlord. The deposit is typically inclusive of administrative fees. Any grounds for deduction from the deposited, should be specified in the agreement. The deposit is returned to the tenant after the completion of the tenancy period, assuming that there are no deductions applicable,”

 

Who bears the cost of repairs in a rental home?

Experts believe that ideally the licensor should bear all costs arising out of wear and tear and structural damage caused to the licensed premises, on account of the monthly license fees enjoyed by them. However, most of the parties come to an understanding, whereby, the licensor bears the costs of all long-term structural damage, while regular wear and tear is borne by the licensee.

 

Under what condition can a landlord ask the renter to leave the property?

A landlord can ask the tenant to vacate under two conditions:

  • Eviction with a cause and
  • Eviction without a cause

\“Landlords can allow the tenant the pre-decided notice period, to look for alternate accommodation, in case of eviction without cause. In most situations, the following causes can be a reason for eviction:

  • Consistent delay in the payments received from the tenant.
  • Violation of a term or a condition specified in the agreement.
  • Illegal activities on the leased property.
  • Serious damage to the rental property.”

 

Increase in rental

Increase of rent is entirely up to the understanding arrived at between the licensor and the licensee. Strictly as per the law, there is no cap on such increase and the licensee must negotiate and settle on fair terms, in respect of the increase in rent.

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What is an agreement for sale?

An agreement for sale, is an agreement to sell a property in future. This agreement specifies the terms and conditions, under which the property in question will be transferred. The Transfer of Property Act, 1882, which regulates the matters dealing with the sale and transfer of house property, defines the contract for sale or an agreement for sale as under:

“A contract for the sale of immovable property, is a contract that a sale of such property shall take place on the terms settled between the parties” – Section 54. Section 54 further provides that “It does not, of itself, create any interest in or charge on such property.”

From the above definition, it becomes amply clear that an agreement for sale contains a promise to transfer a property in question in future, on satisfaction of certain terms and conditions. So, this agreement itself does not create any rights or interest in the property, for the proposed buyer.

What the sales agreement creates, is a right for the purchaser to purchase the property in question on satisfaction of certain conditions. Likewise, the seller also gets the right to receive the consideration from the buyer on complying with his part of the terms and conditions.

In case of failure of the seller to sell or hand over possession of the property to the buyer, the buyer gets a right of specific performance, under the provisions of the Specific Relief Act, 1963. A similar right is available to the seller under the agreement, for seeking specific performance from the buyer.

See also: Can RERA overturn ‘forced consent’ agreements procured by builders for changing project plans?

 

Supreme Court ruling on sale deed and agreement for sale

The sales agreement may or may not result into an actual sale of the property in question. Some of the stamp duty laws, like the Maharashtra Stamp Act, deem an agreement for sale of an immovable property, on the same footing as a proper deed of conveyance and therefore, are subject to the same stamp duty as is applicable on the proper deed of conveyance or sale deed of an immovable property. Due to such deeming provisions, requiring payment of stamp duty on an agreement for sale, people mistakenly perceive an agreement for sale, as a proper sale deed.

The Supreme Court of India in 2012, in the case of Suraj Lamp & Industries (P) Ltd (2) v State of Haryana, while dealing with the validity of sales of immovable properties made through power of attorney, has held as under:

“Immovable property can be transferred/conveyed only by a deed of conveyance (sale deed), duly stamped and registered as required by law. We, therefore, reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.”

“Any contract of sale (agreement to sell), which is not a registered deed of conveyance (deed of sale), would fall short of the requirements of Sections 54 and 55 of the Transfer of Property Act and will not confer any title, nor transfer any interest in an immovable property (except to the limited right granted under Section 53A of the Transfer of Property Act).”

According to the Transfer of Property Act, an agreement for sale, whether with possession or without possession, is not a conveyance. Section 54 of the Transfer of Property Act enacts that the sale of an immovable property can be made, only by a registered instrument and an agreement for sale does not create any interest or charge on its subject matter.

 

Consequence of failure to execute a sale deed

As per the Indian Registration Act, 1908, any agreement for transfer of any interest in an immovable property of value more than one rupee, is required to be registered.  So, if you have purchased any property under any agreement for sale, without it being followed by a proper sale deed, you do not get any right or interest in the property purported to be transferred under the agreement of sale.

This absolute rule is subject to the exception provided under Section 53A of the Transfer of Property Act. Section 53A provides that where the buyer has obtained possession of the property that is subject matter of the transfer, while fully complying with his part of the obligation under the agreement, the seller shall not be entitled to disturb the possession so granted to the buyer. It may be noted that Section 53A provides a shield to the proposed transferee against the transferor and debars the transferor from disturbing possession of the transferee, but it does not cure the title of the buyer to the property. The ownership of the property still remains with the seller.

So, in the cases where you have purchased any property under a sales agreement and got possession, the title of the property still remains with the developer, unless a sale deed subsequently has been executed and registered under the Indian Registration Act. Thus, it becomes clear that a title in an immovable property can only be transferred by a sale deed. In the absence of a duly stamped and registered sale deed, no right, title or interest in an immoveable property, accrue to the buyer of the property.

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TS will help AP build Polavaram, support SCS cause: KCR

Hyderabad: Chief Minister K Chandrashekhar Rao on Monday announced that Telangana would help Andhra Pradesh build the Polavaram project and will also take up and support the demand for Special Category Status for AP.

“Contrary to AP Chief Minister N Chandrababu Naidu’s allegations that Telangana State is trying to stall Polavaram project, I declare that we will help the neighbouring State build the project. After all, water from Godavari is flowing into the sea and we don’t want to see that go waste,” he said.

“Once the general elections are over, the TRS MPs will also take up and support the issue of extending SCS to AP,” the Chief Minister said, virtually pulling the rug from under Naidu’s feet for all the canards he has been spreading on the role of Telangana in that State’s progress.

Pointing out Naidu has only been cursing him at every election meeting, Chandrashekhar Rao said he had always believed in the ‘live and let live’ approach. “We don’t have any ill-feelings towards the people of Andhra Pradesh, nor do we grudge development in that State. There are, however, leaders like Naidu who are trying to create animosity between the people of the two States,” he said.

Stating that Telangana did not believe in politics of hatred, he said everyone should live happily and prosper. “We don’t believe in caste or religion. We don’t subscribe to selfish politics, and are proud of the Ganga-Jamuna tahzeeb that Telangana is known for,” he said.

Quoting latest surveys, the Chief Minister said the TRS would win 16 seats in the State, and YSRCP led by Y S Jagan Mohan Reddy was expected to do well in the neighbouring State. “After the elections, we will wage a battle together for the progress of both the States,” he said.

Referring to Naidu’s poser to Jagan Mohan Reddy whether Chandrashekhar Rao had whispered in his ears that he will extend support for SCS, the Chief Minister said it was not his habit to resort to such things. “We do things openly and without any fear unlike Naidu who seeks refuge in the dark for his nefarious activities,” he said.

The AP chief minister, of late, has been referring to Jagan’s assertions at his meetings that the TRS had assured him of the party’s support for SCS, and that the two parties would work together to bring pressure on the Centre for the SCS

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Black money from Hyderabad’s realty for poll funding

Hyderabad: The spate of cash seizures carried out by the police in coordination with flying squads ahead of the Lok Sabha elections has a real estate twist to it, say police sources.

The black money earned through the booming real estate business in the city and its suburbs was being diverted to fund candidates during the elections. It was found that cash in the denominations of Rs 500 and Rs 2,000 notes were transported in cars and trains for distribution among voters, sources said.

According to a senior police official, there is more scope for black money in real estate as most realtors would insist on buyers to pay a major portion of the amount in black with the remaining in white. The black money that was earned through the sale of plots and flats was being used during elections.

 

For politicians in Andhra Pradesh, Hyderabad has become a major source of money for funding during elections. It is a known fact that a majority of politicians from AP established real estate companies and did brisk business by selling swanky flats and duplex houses on the IT corridor in Madhapur and Gachibowli, apart from the busy areas of Kukatpally, Miyapur, Nizampet, Dilsukhagar and Kothapet, among others.

The same politicians were striving hard to transport money for election funding in AP, an official said. But, Income Tax (I-T) Department officials said no one was willing to claim the seized money fearing payment of high fines under the amended I-T Act. Under Section 271 AAC of I-T Act, a person possessing unaccounted money will have to pay a tax of 103 per cent, which would be three per cent more than the seized amount.

The classic case in point is the recent seizure of Rs 2 crore at Hitec City railway station in Madhapur on Wednesday night following the arrest of N Sri Hari and A Pandari, both office assistants in Jayabheri Properties. The cash stacked in two bags was supposed to be delivered to Rajahmundry MP M Murali Mohan, who was to distribute it to voters. In another case, three persons reportedly associated with real estate business were also caught by the
Osmania University police at Tarnaka for transporting Rs 49 lakh.

Special teams to control the flow of cash

The Telangana police have constituted special teams to control the flow of unaccounted cash through air, rail and road in view of the elections on April 11.

Flying squads, static surveillance teams and Income Tax (I-T) Department surveillance teams have already launched a crackdown on those transporting cash illegally. The main focus was laid on the borders between Telangana and Andhra Pradesh to prevent flow of cash from Hyderabad to AP, where elections for State Assembly and Lok Sabha would be conducted simultaneously.

The I-T Department has deployed a separate team at the Rajiv Gandhi International Airport (RGIA) in Shamshabad to keep a tab on the flow of money. As on April 6, the Police and I-T Department seized Rs 41 crore (Rs 41,04,71,113 ) during separate searches conducted across the State.