State-wise Rent Control
Notifications & Orders During COVID-19
Authors: Nikhil Sukhija & Natasha Syal
Introduction
Given
the unprecedented nature of the widespread outbreak of COVID-19 and the
response of the governments, there high probability that COVID-19 would
constitute a force majeure event under many contracts where such clause has
been incorporated. ‘Force majeure’ is a French phrase that literally translates
to “superior force”. It can be used by the non-performing parties in a contract
to avoid the liability for what would otherwise amount to a breach of a
contract.
There are certain underlying principles for the applicability of the force majeure clause, which includes:
There are certain underlying principles for the applicability of the force majeure clause, which includes:
·
For an event to
qualify as force majeure, it must be unforeseeable by the parties;
·
The event
renders the performance of a contract impossible;
·
The very basis
of such clauses is that the events are beyond the reasonable control of the
parties.
The official memorandum , dated 19.02.2020 issued by Ministry of Finance, Department of Expenditure Procurement Policy Division, headed as “Force Majeure Clause” clearly states that spread of Coronavirus (COVID-19) should be considered as a case of natural calamity and FMC may be invoked, wherever considered appropriate and by following the due procedure[1]. However, the applicability of the FMC depends on the interpretation of the respective contractual terms and clauses.
The unprecedented global pandemic has imposed a nation-wide halt on the economic activities. The situation is overwhelming for tenants, who wants to get reduction in the lease consideration as well as the landlords, who wants to at least maintain the status quo, if not a regular increment.
COVID-19: Directions by Central
Government
1. Ministry of Home Affairs (MHA), dated 27.03.2020,
issued advisory to all the States/UTs to make adequate arrangements for migrant
workers, students, etc. from outside the States to facilitate Social Distancing
for COVID-19. MHA advised that states/UTs need to ensure that hotels, rented
accommodations, hostels etc., continue to remain functional and delivery of
essential items is streamlined, so that students, working women, hostel
inmates, etc., are allowed to continue in existing facilities, while observing
precautions.[2]
2. Ministry of Home Affairs, through its order dated
29.03.2020 issued directions under Section 10(2)(l) of the Disaster Management
Act, 2005 to the landlords for not making any demand for a period of one month,
where the workers, including the migrants and students are living in rented
accommodation. It was also directed that a strict action shall be taken against
such landlords for forcing labourers and students to vacate their premises.[3]
3. Ministry of Electronics and Information Technology
(MeitY) on 16.04.2020, issued a notification, providing 4 months’ rental waiver
to the IT Companies Operating from Software Technology Parks of India (STPI)
Centers. STPI is an autonomous society under Ministry of Electronic &
Information Technology, Government of India and it has 60 centers across the
country.[4]
4. Ministry of Finance, dated 05.15.2020, announced
short term and long term measures for supporting the poor, including migrants,
farmers, tiny businesses and street vendors and introduced a scheme for
Affordable Rental Housing Complexes for migrant workers and urban poor to be
launched. It states, “Central Government will launch a
scheme for migrant workers and urban poor to provide ease of living at
affordable rent. Affordable Rental Housing Complexes will provide social
security and quality life to migrant labour, urban poor, and students etc. This
will be done through converting government funded houses in the cities into
Affordable Rental Housing Complexes (ARHC) under PPP mode through
concessionaire; manufacturing units, industries, institutions, associations to
develop Affordable Rental Housing Complexes (ARHC) on their private land and
operate; and Incentivizing State Govt. agencies/Central Government
Organizations on similar lines to develop Affordable Rental Housing Complexes
(ARHC) and operate. The exact details of the scheme will be released by the Ministry/Department”.
[5]
COVID-19: State-wise directions
Chhattisgarh
1. Chief Minister, Mr. Bhupesh Baghel, in a cabinet
meeting held on 13.05.2020, undertook to provide housing facility at minimum
rates under the Mor Awas-Mor Chinhari Yojana to the tenants.[6]
Delhi
1. Through its official order, dated 24.03.2020,
Government of NCT of Delhi issued directions to the landlords/house owners that
any action of forcing doctors/paramedical staff/healthcare personnel to vacate
their rented residences will be deemed as obstructing public servants in
discharging their duties.[7]
2. Delhi Disaster Management Authority, through order
no. 122-A, dated 29.03.2020, issued directions under Section 22 of the Disaster
Management Act that no landlord shall demand payment of rent or not to force
any worker, including migrant and student to vacate their rented premises for a
period of one month. [8]
3. In relation to the previous issued order no. 122-A,
on receiving complaints against landlords forcing students for immediate
payment of rent, the Delhi Disaster Management Authority issued directions,
dated 22.04.2020, to the district magistrates for undertaking awareness
campaign and to advise affected persons to lodge complaints to Police Control
Room by calling ‘100’.[9]
Haryana
1. Directorate of Information, Public Relations and
Languages, Government of Haryana, dated 06.04.2020, decided to allocate special
funds amounting to Rs.288.92 Crore to 87 Municipalities to combat the situation
arising of out of the spread of COVID-19[10].
It was also informed that the due date with regard to payment of water and sewage
bills, property tax and rent, tehbazari and licence fee on Municipal shops or
properties has been extended.
2. Directorate of Information, Public Relations and
Languages, Government of Haryana, dated 19.05.2020 while announcing various
relief measures, a spokesperson of the Department of Industry and Commerce
announced waiver of rent due against all Government , Panchayati Raj
Institutions, Urban Local Bodies’ Buildings and shops including Start-ups in
the Start-up incubators of the Department of information Technology for the
period from March 15, 2020 to May 31, 2020.[11]
Karnataka
1. Government of Karnataka issued an order dated
26.03.2020, to the landlords/house owners that any action of forcing
doctors/paramedical staff/healthcare personnel to vacate their rented
residences will be deemed as obstructing public servants in discharging their
duties.[12]
Maharashtra
1. The Maharashtra government has issued instructions on
17.04.2020 to the landlords and house owners to defer rent collections from
tenants for at least three months in the wake of the COVID-19 crisis. The
landlords/owners have been directed to not evict tenants due to non-payment of
timely rent or rent exhaustion amid the economic gloom and doom resulting from
the lockdown.
The
homeowners were hereby advised to postpone the lease rent for at least three
months[13].
Telangana
1. The state government of Telangana released an order
dated 23rd April’2020 regarding deferment of collection of rentals
for a period of 3 months w.e.f March 2020 for properties leased for residential
purposes. The government exercised its powers under the Disaster Management
Act’ 2005 and Epidemic disease Act, 1897, directed the property owners in the
State of Telangana to defer collecting rentals from tenant, wherever the
property (permanent, semi- permanent and temporary) is rented for residential
purposes, for a period of 3 months w.e.f. March 2020, without interest for the
said rented premises and further, to collect this amount in instalments
subsequently after three months. Further, whoever violates these orders shall
be liable for punishment as per the two mentioned Acts.[14]
Conclusion
Given
the unprecedented nature of events and the prolongation of the coronavirus
induced lockdown, the economic activities are bound to slow down. In these
times, it is best to understand the situation of the other party. Efforts
should be made to change the stance from competition to cooperation. Decisions
with respect to the charge of rent, increment in the rent, waiver and reduction
of rent should be made mutually between the parties and as per the clauses
incorporated in the agreements.
For any further queries, clarifications, and suggestions, please feel free to contact the undersigned author or write to us at protalkz03@gmail.com.
Email ID: protalkz03@gmail.com
Ph No: 9555604055
No comments:
Post a Comment