What is Fair rent? Discuss the procedure for fixation of fair rent under the relevant law.
Introduction: In India, "fair rent" refers to the amount of rent that is established by the
legislative provisions specified in the various Rent Control Acts in the various states. This
idea seeks to guarantee a reasonable return for landlords while protecting tenants from
excessive fees. According to current legislation, the highest rent a landlord can charge a
renter for a residential or commercial property is known as the "legal fair rent." The location,
size, amenities, and condition of the property are some of the variables that are often taken
into consideration.
Under Sec 17 of the West Bengal Premises Tenancy Act, 1997, the Controller shall, on
application made to him either by the landlord or by the tenant in the prescribed manner,
fix the fair rent in respect of any premises in accordance with the provisions of this Act.
Procedure for fixation of fair rent under the West Bengal Premises Tenancy Act, 1997
1. Under Sec 17(2) of the West Bengal Premises Tenancy Act, 1997 Any property built
and leased after 1984 will have its fair rent set for a year based on the annual payment
of an amount equal to six and three-fourths percent per year of the total amount of the
actual cost of construction and the market price of the land on the date of starting
construction.
2. Under Sec 17(3) of the said act, when a tenancy has been in place for twenty years or
longer for a property built in or before 1984, the fair rent is calculated by adding the
rent as of 1.7.1976 no more than three times, deducting any increases, and paying the
current rent if it exceeds the increased rent calculated in accordance with Schedule II.
3. Under Sec 17(4) of the act, in cases where a tenancy has been in place for ten years or
more but less than twenty years for properties built in or before 1984, the fair rent will
be calculated by adding the rent as of 1.7.1986 no more than twice, followed by
deducting any increases in accordance with Schedule III, or by accepting the present
rate if it exceeds the increased rent calculated in accordance with that Schedule.
i. As per Sec 17(4A) of the act, where a tenancy subsists for twenty years or
more in respect of the premises constructed in or before the year 1984 and
used for commercial purpose, the fair rent shall be determined by adding to the
rent as on 1.7.1976 five times or by accepting the existing rent if such rent is
more than the increased rent.
ii. As per Sec 17(4B) of the said act. where a tenancy subsists for ten years or
more but less than twenty years in respect of the premises constructed in or
before the year 1984 and used for commercial purpose, the fair rent shall be
determined by adding to the rent as on 1.7.1986 three times or by accepting
the existing rent if such rent is more than the increased rent determined under
this sub-section.
4. If any property is exempted from the aforementioned clauses in this section, the fair
rent will be determined by taking into account the circumstances, location, and state
of the property as well as the amenities offered there. If there are other comparable or
nearly comparable properties in the area, the rent due for those properties will also be
taken into consideration.
Conclusion: Fair rent is a vital concept in landlord-tenant relationships, ensuring a balance
between the interests of both parties. By considering factors such as market rent, property
condition, location, and amenities, fair rent determination promotes affordability, stability,
and investment in the rental market. Effective implementation of fair rent mechanisms, as
outlined in laws such as the West Bengal Premises Tenancy Act, 1997, is crucial for
maintaining harmonious relationships between landlords and tenants, ultimately benefiting
the broader community.
