R Ashoka, revenue minister in the Karnataka government, said action will be initiated against house owners if they demand rent from tenants or force them to vacate the property due to non-payment.
“In such a situation, extreme action can be taken against the house owners and they may be jailed for up to one year under the Disaster Management Act,” said Ashoka, who is also the vice-chairman of Karnataka State Disaster Management Authority. He, however, did not clarify if the diktat was meant only for tenants belonging to the economically weaker section or it applied to people across society.
Ashoka did not respond to calls and text messages sent by ET.
As per online real estate platform Nobroker.com, Bengaluru has 2.9 million houses on rent, which includes apartment flats, small gated societies and standalone houses. According to an estimate, these properties generate about Rs 4,060 crore of rent per month.
“Any change in regulation will impact this massive amount of rental amount the city pays and receives,” said Amit Agarwal, CEO at NoBroker.com.
Though the Karnataka Rent Control Act, 2001 governs the relationship between a landlord and tenant, the government can come up with an amendment or ordinance under the Act to issue directions with respect to the collection of rent and eviction of premises.
But tax experts say the fiat can be challenged in court. “In my opinion, using the powers under the National Disaster Management Act for rent-related disputes will be amenable to challenge before the high court or Supreme Court,” said Ashish K Singh, managing partner of law firm Capstone Legal. “It is clear that the mandate of NDMA does not cover the relationship between landlord and tenant.”
Another lawyer said on condition of anonymity that the state government may have taken cue from Singapore that has passed the Covid-19 (Temporary Measures) Act 2020, which allows a tenant who is unable to pay rent and other dues under commercial leases to seek a temporary relief from those obligations for six months.
According to property brokers, several potential home buyers have postponed their plans to buy property, which has pushed up the demand for rented homes in Bengaluru.
The end user’s preference has shifted to renting property close to the work place and most are currently in a wait-and watch mode, expecting a softening of prices and home loan rates.