Rent Deference During the Pandemic

“I found a family of mice in my pile of empty pizza boxes. I want a discount on rent.”

 The outbreak of COVID-19 is a global pandemic and on March 14, 2020 the government of India declared COVID-19 as a "notified disaster". The Coronavirus pandemic has prompted the nation to its most jarring standstill in a long time. The lockdown has slowed down markets, admission to law colleges for aspiring lawyers, Court systems, factory operations and several businesses, affecting employment and source of income of many.

Introduction

Rental agreements in India are the most common types of agreements as India being one of the most populated countries, does not have enough resources and utilities per capita. People here work by renting places, and most of the outstation employees, workers and students of top law colleges in Delhi NCR who come to work and study also prefer to stay in a rented flat. It is important and always advisable that property-related deals shall be secured through legally binding agreements on the parties involved, the important thing is that both the parties involved shall make use of a valid rent agreement format inclusive of all the clauses that shall be beneficial to both the parties and at its best shall protect the interest of both the parties. The agreement should work as a reference document for the parties involved. The rent agreement should be made keeping in mind all the legalities and legislation so that it is an error-free agreement and can be presented as collaborative evidence when a dispute arises among the parties.

These agreements are simple contracts which are legally enforceable in the court of law and is therefore made under the Indian Contracts Act, 1872. Any rental agreement which is made in keeping the mind, the essentials of a valid contract, is considered as a valid rental agreement.

Rental agreements are right now the centre of attraction, as its position in the time of Covid-19 is highly unstable. There are circumstances, under which, an individual is not using a place, but is still liable to pay the rent as per the agreements. Though there have been schemes and offers by the Indian government, still the relaxation policy for such agreements is unclear.  

Delhi High Court’s View 

One of the pertinent issues landlords and tenants in India are grappling with during the COVID-19 crisis is the suspension of monthly rentals during the government announced lockdown periods. 

In its judgment dated 21 May 2020 in Ramanand and Others v. Dr. Girish Soni and Others, the Delhi High Court (Court) has held that the period of lockdown on account of COVID-19 does not excuse the payment of rental amounts.

 Halt to education system

UNESCO figures indicate that over 32 crore students, across the world, from pre-primary to higher education levels, have been impacted by a lockdown in India. Coronavirus fractured a large chunk of India's education system. In the view of emergency caused due to COVID-19, the admissions to best law colleges in Greater Noida, and colleges of all the streams are undergoing a hard time.

Government Policies on Economic Relief to Affected Parties

•      The central government, along with a few state governments, that have cities with size able migrant, and floating populations have put in place regulations to help the middle class in need of financial respite.

•      The central government has mandated that no landlord shall collect rent for the next few months due to the pandemic. Other measures, including arranging special trains for transit have been arranged but for the sake of this paper, the notification dated 29th March is the sole focus since it relaxes rent collection obligations and places the same under the purview of Sec, 57 of the Disaster Management Act, mandating a year of imprisonment or fine.

•      The state governments of Karnataka and NCT Delhi have announced a similar measure in so far as both these states extend protection to all tenants and halts payment of rent for at least one month.

 

There are other ways through which the rent is reduced or waived off in these hard times. One of the ways is by directly convincing the owner of the property for some concession in the monthly payments of the rent till the nationwide lockdown is over.

The parties may execute an Addendum with the help of a legal entity or try to negotiate and put in writing and execute the Addendum. The strict requirement of compulsory registration of such pandemic time Addendums or novation of contracts, during these hard times, must be dispensed with by the governments so that there is no unnecessary hassle. 

Conclusion

Post Covid-19, there are significant changes that the country would witness. Similarly, the rental agreements will have to go through their own changes. However, it is important to understand that the basic structure of a rental agreement would not change. It might undergo some amendments, but its validity and the way they are made shall remain the same. It is advisable that once the things become normal, execution of such agreements shall be only made with the help of an experienced legal person to reduce such ambiguity in the future outcomes of the agreement.