What is the purpose of entering into a Rental Agreement?
There are two types of Leases or Rentals.
One is, in respect of immovable property of agricultural and industrial leases.
The other one is, building leases or rentals.
Again, there are two kinds of Leases or Rentals.
One is, the yearly leases, which is more than a year.
Another one is, the monthly leases or rents.
Commonly, the yearly leases are called as ‘leases’.
The monthly leases are locally called as ‘rentals.’
It is a common practice in Tamil Nadu, monthly leases for a total period of 11 months (not a full year) is called as Rentals. And the long leases, i.e. more than a year or yearly leases of any number of years are called as ‘Leases’.
As per the Registration Act 1908 (applicable as per the Tamil Nadu Amendment Act) the monthly leases need not be registered, unless if the period exceed one year and more. Therefore the public used to put the period of lease for 11 months only and not for 12 months, for the specific purpose of avoiding the leases from registration.
Apart from that, in cities and major towns, the Special Act called the Rent Control Act is applicable to the tenants residing or carrying on business in those cities or major towns, (which are notified the State Govt).
Since the Rent Control Act is a SPECIAL ACT the general law of leases do not apply to those tenancies, based on the legal dictum that ‘the Special law will prevail over the General Law.’
Hence those buildings covered in the notified cities and towns, the Special law will alone apply.
The Special Law, say, the Rent Control Act does not insist to enter any Rental Agreement or Lease Agreement between a tenant and his/her landlord/landlady.
The Rent Control Act gives the ‘special protection’ to a tenant from unlawful, whimsical eviction by his/her landlord/landlady. Irrespective of any agreement between the Tenant and the Landlord, the tenant is protected by the Rent Control Act. That is, the Landlord cannot evict a tenant without any lawful reasons stated in the said Act, such as willful default in payment of rents, premises requires for landlord’s own use or any additional accommodation of his/her family members, any act of waste by the tenant, any illegal or immoral activities committed by the tenant in that premises etc.
Then, why a Rental Agreement is necessarily entered between the Landlord and the Tenant?
It is all for the convenience of the parties, i.e. the Landlord and Tenant.
It may prove the nature of relationship of the Landlord and Tenant, rate of monthly rent, amount paid as advance, purpose of tenancy whether it is for residential purpose or non-residential purpose etc.
By using the rental agreement, the parties (either Landlord or Tenant) cannot get any other benefit of any contractual terms, as the tenancy is a ‘statutory tenancy’.
AND
If any tenancies apart from the notified cities and towns area, then the Landlord and Tenant has naturally enter into a Rental agreement or Lease agreement (depends on the period of lease) and all the terms and conditions are really and legally binding the parties thereon. For such cases, the specific chapter of ‘Leases” in the Transfer of Property Act 1882 would apply. Any competent civil court has jurisdiction to try those cases of eviction or ejectment of a tenant.
