Fair Rent & Its Determination by Rent Controller.

NOTE:

Before the Rent Restriction Ordinance 1959. It was simply fixed by the rent controller by moving application to him by one party or the other. It was revealed by the Supreme Court of Pakistan in Its authoritative Judgement (SCMR 2000 page 559) Barkat Ali VS ........ (by His lordship Irshad Ahmed Khan) 

Fair Rent & Its Determination: Rent Restriction Ordinance talks about the fair rent which is to be determined. Both landlord & tenant have right to put their objection regarding fixation of fair rent to Rent Controller. The rent, by rent controller, taking in consideration definite things & for that purpose Rent Controller is empowered to hold inquiry & then fix a fair rent.

Provision: Section 4 of Rent Restriction Ordinance, 1959.

Meaning: The rent fixed by the controller, under section 4 of the rent law of RRO 1959.

Definition: Payment made by tenant to landlord for property demised to him.

Determination of Fair Rent: Fair rent is determined in following way:

Authority to determine rent: Rent Controller has the ultimate authority to determine the rent. It is determined by controller & he alone has duty to fix fair rent. Landlord & tenant cannot fix fair rent by agreement.

Modes of exercising Jurisdiction: rent controller shall exercise jurisdiction power under section 4 on application by landlord or tenant of building. The rent controller does not have suo moto power.

Rent controller hold inquiry for Determining Fair Rent: It is the discretion of rent controller to conduct inquiry if necessary as he deems it fit according to the case situation.

It is the duty of Rent controller to not act arbitrarily while conducting inquiry. Rent controller has to observe principle of natural justice while conducting inquiry. He must hear both parties and give equal time to them.

Rent controller is required to take all evidence produced to him by the parties which enable him to assess fair rent and to pronounce judgment in a case in hand. If controller finds evidence which is insufficient, he may call for additional evidence for determining the fair rent. Rent controller may undertake local inspection for purpose of conducting inquiry and collecting evidence. The nature of inquiry of rent controller is not a judicial proceeding but inquiry conducted by him is quasi judicial.

Factors to be taken into Consideration while Determining Fair Rent: Following steps should be taken into consideration while determining fair rent;

The rent controller should consider the rent of same building or similar accommodation which has been paid by such other tenant at the time of making application and during the period of 12 months prior to the date of making application.

While determining fair rent, the rent controller has to take into consideration the rise in cost of construction charges if any. Whatever rise has been occurred to the cost of repairing charges, must be taken into consideration by rent controller.

While determining fair rent imposition of new taxes will also be taken into consideration by rent controller. Rent controller takes into consideration other factors as well, For example: long stay of tenant for 20 years in building.

Effect of Order of fair Rent: Fair rent is fixed in respect of premises of property/land and not in relation to person and it does not operate in personam rather it operates in rem.

Effect of Non Fixation of fair Rent: If there is no fair rent determined by the court of law then the landlord can increase rent as such there is no such bar or restriction where fair rent has not been already fixed.