The High Court has directed the government to form a high-power commission tasked with recommending maximum and minimum standard house rents for different areas in the capital city, reports Dhaka Tribune.
The commission, to be formed by the cabinet secretary, will first identify the problems that exist by holding discussions with both house-owners and tenants. It will also put through recommendations for updating the Premises Rent Control Act 1991.
The court also asked police to take steps regarding house rent-related complaints in all the cities including Dhaka.
Justices Mohammad Bazlur Rahman and Md Ruhul Quddus’s bench passed the order on July 1 in response to a writ petition filed by the Human Rights and Peace for Bangladesh five years ago.
The rights organisation filed the petition in April 2010, seeking the court’s directives for strict enforcement of the 1991 law to prevent the house-owners in Dhaka from whimsically increasing rents and realising rent in advance from tenants.
In May of that year, the court issued a rule asking the government to explain why it should not be directed to enforce the law properly.
During hearing at that time, petitioner’s counsel Manzill Murshid sought HC directives for ensuring bank involvement in rent-related transactions so that the government could collect due revenues. The attorney general’s office opposed the petition saying there were several government rent controllers for settling disputes.
However, a verdict in the writ petition had been pending for two years until the court decided to deliver it yesterday.
In its verdict, the HC bench said that the head of the commission would be a law expert nominated by the Law Ministry. The other members will have to include a university professor, who is an expert on housing and city development; an economist; a senior official of the Housing and Public Works Ministry; a civil society member; consumer rights expert; and a city corporation official.
The commission will fix area-wise highest and lowest house rents through mass hearing if required, said the HC.
The government was asked to appoint a house rent controller at every ward across the country for hearing and settling issues and allegations until the commission is formed.
“This initiative will be taken within the government’s financial ability,” the court said, hoping that the government would amend the 1991 law in line with the commission’s recommendations.
Manzill Murshid told reporters yesterday that house-rent related cases could drop by 80% following the verdict. “People have been waiting for a resolution of rent conflicts and now they are happy to have it.”
The court said there should be a separate authority for controlling rent with jurisdiction to regulate all relevant questions, the plaintiff’s lawyer said.
The court also directed the officers-in-charge all police station in Dhaka to make sure that no tenants are evicted or threatened until the commission’s recommendations are turned into a law. “Complaints must be resolved swiftly and security provided if necessary,” Manzill Murshid said.
According to the Premises Rent Control Act 1991, the annual rent should be equal to 15% of the market-value of a particular premises.
Ironically, most house-owners undervalue their assents in property papers to reduce tax but charge rents in proportion to the actual market-value of their premises.
A former high official of the National Board of Revenue said: “There is a tendency among house owners to undervalue assets to avoid paying high taxes. This is true for housing as well.”
The law also prohibits landlords from claiming or receiving any premium, salami, security or any other sum in addition to monthly rent unless consented by a rent controller.
But in practice, it is hard to find a house in Dhaka where the owner has not charged several months’ advanced rent from tenants as security deposit.
Second 13 of the law stipulates a landlord to give his tenants signed receipts for rents in “forms determined by law” and retain a counterfoil.
However, the Dhaka Tribune could not find out if any such “forms determined my law” actually exist.
Generally, the house renting contract between a owner and a tenant is informal, mostly verbal, and hence do not involve any document that could be of any use to law.
According to the Consumer Association of Bangladesh (CAB), house rent has been hiked in several areas of the capital by up to 9.76% in 2014 compared to 2013.
When contacted last night, CAB President Golam Rahman said it is a landmark verdict.
“The existing law is there to protect tenants’ rights but they have so far been deprived due to a lack of implementation. As a result, the people from low income groups have been the worst sufferers,” he said.
“In the slum areas of Dhaka, tenants pay more rent per square feet than those living in some of the posh areas. Poor people have to spend 50-60% of their incomes on paying rents. They do not have the means to run cases either,” said.