Even though the Islamabad Rent Restriction Ordinance 2001 has been in effect for over a decade, thousands of tenants in the capital find it challenging to pay the exorbitant rent demanded by their landlords, because of a severe shortage.
Due to its status as the federal capital and relatively peaceful environment, a continuous influx of migrants over the years has resulted in skyrocketing rent. This is true for housing in low-income areas and the issue is set to be compounded by a wave of internally displaced persons from North Waziristan.
What the law says
According to section 10(1) of the ordinance, the rent of residential and non-residential units stands automatically increased at the end of every year by 10 per cent. Problems arise when the landlord arbitrarily raises the rent by more than 10 per cent in violation of the law, said Amir Abdullah, a lawyer who pursues rent-related cases in the courts.
If the landlord increases the rent by more than 10 per cent, the tenant can challenge this in court or refer the matter to a mediation council, he added.
Money demanded upfront by landlords compounds problems for tenants, most of who belong to the salaried class and cannot pay rent in lump sums, which ranges from four months to one year in advance. Those who offer to pay advance rent for up to a year, crowd out others competing for the limited number of housing units available. All payments in connection with tenancy between landlord and tenant will be made through crossed cheques or a receipt will be made out for the sum, the act states.
Tenancy agreements are usually drawn up for two years, but the time period is decided by mutual consent among landlords and tenants and is not specified by the law, said the lawyer. Both the tenant and the landlord are supposed to submit the agreement before a controller, a civil judge in this case within 30 days of signing the agreement, Abdullah explained.
But both parties fail to produce the document before the controller and are later engaged in litigation to settle disputes in court on matters which should have been spelt out in the agreement, he said. “This costs time and money as they engage lawyers to settle the case.” A landlord can only rent out his house after entering into a tenancy agreement in writing, according to the act.
Considering the number of cases pending in the courts, litigation seems to be the only viable option for resolving tenancy disputes. “Over 100 cases related to disputes between tenants and landlords are initiated in the city district courts every month,” said a court official.
“The majority of cases are filed by landlords after tenants refuse to vacate their houses.” The case continues for six months or more, but most of the cases are decided in favour of the landlord, he added.
Published in The Express Tribune, July 16th, 2014.
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As tenant, even if you dont agree to pay more than 10pc increase, landlord will give you 30 days' notice and rent out to another party within 2 days!. whats the point of two or three years' contract? :s
The little piece of ordinance that you have quoted is a very vague one at best. Automatic increase usually refers to an increase unless specified. I dont see how you have come to interpret it as the maximum increase in rent allowed to the landlord. And your quote does not also specify what constitutes a year. Fiscal year, calender year, an year of occupancy? Im sure if this issue is not clarified in the ordinance then landlords also have a good chance to manipulate this part of the law to their advantage.