 Online edition of India's National Newspaper Thursday, Jun 26, 2008 ePaper | Mobile/PDA Version |
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Tamil Nadu
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Chennai
CHENNAI: The rapid rental appreciation in the city has put the common man to hardship. High school teacher Ramesh Babu’s house rent was increased recently. He says, “My house rent allowance remains very low. Now I have to cut my extra spending on vegetables and fruits.” “The influx of young IT professionals is one of the factors contributing to the rental appreciation,” says an official of the PWD (Buildings). Shanmuga Priya, a software engineer with the TCS, says, “The landlords increase the rent every six months by asking us to vacate. They claim that other IT people are ready to pay higher rent, which is true.” Legal experts say that proper agreement signed by the tenant and the landlord may avoid the problem of frequent rise of rental value of the same building. “The tenants have got the right to approach the rent control court to get the fair rent fixed. The rent control court takes into consideration the guidelines of the Public Works Department (PWD) and comes to a conclusion. Thus there is a legal remedy for the tenants when the landlord demands more rent from the tenant,” says a legal expert. “However, it should be borne in mind that this is a private contract between the landlord and the tenant. Hence direct intervention by the government is not possible,” he adds. The investment in housing is a way of tax reduction for some. This has also played a role in increasing land value and associated rental appreciation, says Palanisamy, an official of the State Bank of India. The plinth area rates for arriving at the valuation of buildings for rental calculation was approved for adoption with effect from May 1. This is done every year by the PWD. The land cost is based on the guidelines of the Registration Department. The building value is calculated by the Chief Engineer Buildings. The total cost of the building is the sum of the building value and land value. The 12 per cent of the total cost of the building is the rental value of the building for commercial purpose and nine per cent of the total cost is calculated for residential purpose. Thus, the land cost plays a major role. “High land value in the city on account of investments by real estate companies is a factor determining the rental appreciation,” says an official of the PWD. “Brokers play a role in determining the rent. They are paid one month’s rent by the tenant. So they increase the rent in order to gain more,” says Vijayakumar, a resident of Anna Nagar. N.B.Punniamoorthi, a government official, says, as the transport facilities from the city outskirts are not very efficient, the people look for houses near the office. This has also contributed to the increase of rental values in the city. “Better transport connectivity if provided may encourage people to reside on the outskirts of the city. This may reduce the rent to some extent,” he adds.
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