Landlords also often take advantage of tenants when it comes to maintenance, repairs and service charges
"Premises Rent Control Act, 1991” – how many tenants and landlords even maintain it or are actually aware of it? Maybe a lot of tenants know about there being a law to do with their rights, but finding landlords that enforce it is a rare case. As a result, stories of “regretful” tenancy experiences are quite common in Bangladesh. And even though a lot has changed over the course of the last few years, and many tenants are more aware of their rights, there are still an extraordinary number of people who are being taken advantage of due to their unfamiliarity with tenancy laws.
“Advance rent” is the bane of all tenants in the country. Even if a potential renter finds a home to their liking and has the ability to afford it, a high-amount of advance on rent dissuades them from moving forward with their decision. For example, the current average rent of a 1,500 square feet flat in Bashundhara R/A is about Tk30,000 – yet, the tenant may need to pay up to Tk90,000, which is equivalent to three months of rent! This is a common practice in the country – paying two or three months of rent in advance. This can go even up to six months in some cases, even though Section 10 of the Premises Rent Control Act clearly states that a landlord can ask for one month’s rent in advance at most. Asking for anything more is unlawful and can be punished with a fine that can extend to Tk2,000 on the first occasion and may be increased.
The scenario is the same when it comes to rent increase as well. According to Section 16, the law does not allow increasing the rent of an apartment within two years of the standard rent being fixed, unless the landlord implemented major renovations to the property in question.
Upon analyzing historical data on rent, we have found that the rent of apartments in Dhaka has increased by over 200% in the last 20 to 25 years! If the landlords actually followed the rules, this number would have been much lower than what it is now, since the rent was supposed to increase by only 10% of the previous rent every two years or more.
Landlords also often take advantage of tenants when it comes to maintenance, repairs and service charges. As per Section 21 of the Premises Rent Control Act, it is the landlord’s responsibility to ensure and maintain the functionality of the building’s supply and maintenance of water, electricity and shared utilities. It is also the landlord who is supposed to ensure they are repaired if needed. However, the cost of such repair and maintenance is usually put on the shoulders of the tenant – resulting in paying an excess of Tk5,000 to Tk10,000 on top of rent every month.
A rent receipt is another aspect of the tenancy law that is rarely maintained in Bangladesh. While a lot of tenants throughout the country may only be vaguely familiar with rent receipts, the concept itself is not new at all. In fact, it dates back to the East Pakistan days when an ordinance was passed during the latter half of the 1950s, barring landlords from providing antedated rent receipt to their tenants.
The idea of the receipt is clear and simple, but rarely followed – when rent is due, the landlord will provide a paper or receipt detailing the charges of lodging, including house rent and other additional charges, to the tenant that both parties sign only after the landlord receives the due amount. This rent receipt formalizes the proceedings and works as an extension of the tenancy contract.
Speaking of which – much of the problems tenants and landlords face can be greatly reduced if tenancy agreements are properly maintained. The document legally binds all parties involved and can be upheld in the court of law. The contract or agreement itself should have all necessary information regarding the tenant, the landlord, and the property itself. It should also hold the terms of the agreement, the responsibilities of both parties as well as how to proceed in terms of eviction and notice.
Basically, the tenancy agreement embodies almost all the aspects of the Premises Rent Control Act and ensures that both the landlord and the tenant can safeguard their rights.
The legal aspects of real estate, like other legal factors, is often seen as complex and convoluted by the layman. Unfamiliarity and disregard for existing tenancy laws have previously made renting apartments difficult and very one-sided. And until landlords, brokers and even the authorities take this matter seriously and enforce the law, tenants will continue to be in woe.