Is Rent Reduction or Waiver a Tenant’s Prerogative during these COVID Times?

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The Union Ministry of Home Affairs in an order dated 29th March, 2020 said, “Wherever the workers, including the migrants, are living in rented accommodation, the landlords of those properties shall not demand payment of rent for the period of one month.” Further, it said that “If any landlord is forcing labourers and students to vacate their premises for non-payment of rent, they will be liable for action under the Act,” invoking measures under the Disaster Management Act, 2005.
While this stands true for workers and students, it is most certainly to help the economically backward, who have to sustain far more pressure than people with regular jobs and a decent lifestyle.
The timely payment of the monthly rental or license fees as amicably and mutually agreed between the landlords and tenants is the essence of any tenancy agreement. Further, both the landlords and the tenants represent and warrant their respective capacities to rent out the premises on the part of the landlords and fulfil all financial obligations by the tenants which also include the payment of rental amounts as well. Secondly, the law presumes that every person creates or tends to create some contingency funds or saves for a rainy day, and therefore if a person has no income during a particular month then he is expected to pay out of his said savings or emergency funds. Thirdly, the dominant purpose of a residential rental agreement is to give the premises on a residential usage basis and whether the tenants are working or not would not create a ground constructive to avoid eviction. Him occupying and using the premises would be sufficient to make the case liable for eviction.
The parties can take recourse to novation of contract under Section 62 of the Indian Contract Act, 1872 where under the parties can ask for an alteration of existing contract on the ground of non-performance or impossibility to perform with a new executable contract. This recourse is applicable only when the landlords and the tenants do not prefer eviction and want to take a U-turn in their understandings.
Who Are Eligible for Rent Waiver?
Economically depressed sections can seek relief under the Disaster Management Act, 2005. This includes construction workers, migrant labourers. However, financially-strained sections of the society are at the core. But, all tenants can ask for the refund of the Security Deposit due to the COVID-19 before moving or shifting into the premises on rent as the status of the contract is called the “Executable Contract” and not “Executed Contract”.


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