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Rental Laws in Punjab - What You Must Know?

19/07/2016

Pakistan-property-law

It has been commonly observed in our society that people usually avoid being in litigations and contacting police and courts to solve any legal matter. Therefore, most of us remain deprived of our legal rights. Though ignorance of law is crime yet we still prefer to be ignorant. For instance, hardly anyone of us may know about Punjab Rented Premises Act, 2009 that regulates the relationship between property owner and tenant. It is mentioned in a research that around 25 percent of urban population in Pakistan reside in rental homes but most of them do not know much about the rental laws. All of us (either we are landlords or tenants) must be aware of the basic legal information regarding rental laws before entering into a rental relationship.

Before going in depth, it is essential to know that Punjab Rented Premises Act, 2009 is the Act that governs the relationship between landlord and tenant for the rental properties in the Punjab province. Both residential and commercial rental properties in Punjab are being covered under this law but the Act is not applicable in the Cantonment areas because the law that covers rental properties in Cantonment areas is Cantonment Rent Restriction Act, 1963.

It is an obligation of every citizen in Punjab to register all rental agreements with the Rent Registrar. Otherwise, in case of negligence, landlord will be subjected to pay heavy fine and he can face serious problems such as, if the tenant refuses to vacate the property. Despite the problems that a landlord can face in case of negligence, most of the landlords and even property dealers do not know much about the law of registering the rental agreement. Therefore, it is seen that hardly 5 percent of landlords in Punjab register their rent agreements.

If you are a landlord and want to register your rent agreement, you must follow the given pointers in order to prepare a valid rent agreement.
  • Complete contact details of landlord and tenant
  • Description of the premises
  • Period of tenancy
  • Due date and mode of rent payment
  • Rate of rent enhancement on per annum basis
  • Purpose to rent out the premises
  • Amount of total advanced rent payment & Security
  • Bank account details, if rent is to be paid through bank

Tenancy Agreement

It is a written agreement between landlord and tenant under which landlord agrees to rent out his premises to a tenant. It shows verbal tenancy agreement is not legal. A landlord should never let out his premises to a tenant except by a tenancy agreement. This agreement should be in writing and must be registered by Rent Registrar. The tenancy agreement entered in the office of a rent registrar will be a proof of the relationship of a landlord and tenant. There is no particular format for this agreement except it must comply with the provisions of Punjab Rented Restriction Act, 2009.

In case, tenancy agreement is not registered with rent Registrar, Rent Tribunal will not entertain any application on behalf of the landlord unless he deposits a fine equivalent to 10 percent of the value of the annual rent in the Government Treasury. If a tenant needs a legal help, he will have to deposit fine amount equivalent to 5 percent of the annual rent in the Government Treasury.

Tenancy agreement can be made for any period agreed between the parties. However, if such an agreement is for a year or exceeding one year, it must be registered under the Registration Act, 1908.

Eviction of Tenant from the given Premises

The law covers the rights of both parties. Under this Act, landlord can ask for tenant' s eviction in case:
  • Tenancy period has been expired.
  • Tenant has failed to pay rent.
  • Tenant has breached the tenancy agreement.
  • Tenant has used the premises for a purpose that is different purpose for which it was let out.
  • Tenant has sub-let the property with landlord' s permission.
Sub-letting is to re-transfer the rented premises to any other party without the consent of landlord.

Most of the landlords worry about their rent amount so they do not follow any legal procedure before renting out their premises. However, let me clear that Punjab Rented Premises Act does not fix any amount or rate of rent. Both parties may agree to any amount of rent by mutual consent.

In my view, there is one flaw in Punjab Rented Premises Act that there is no provision in the Act for the tenant to file an application for refund of security. Therefore, in such case the tenant will have to file a civil suit before the civil court.

Note: The given information is not a substitute of expert legal advice because factual circumstances are always different in every case and a comprehensive legal research is essential to resolve any dispute between tenant and landlord.