Your 101 on Pakistan’s Rental Laws

Pakistan’s original rental law dates back to 1959 when it was passed as an ordinance after Punjab, Sindh, Balochistan and Khyber Pakhtunkhwa (then NWFP) were consolidated into a single unit in 1956. There are now more than five rental laws active in the country in different provinces.

All these laws, however, are based on the West Pakistan Urban Rent Restriction Ordinance 1959. This law was in force until Pakistan remained one unit and then was adopted by each of the provinces with their separate amendments, where deemed appropriate by their respective provincial assemblies. In this blog I will compare the laws and point out their differences.

The rental laws in Pakistan

The five rental laws applicable throughout the country are:

• Islamabad Rent Restriction Ordinance 2001
• The North-west Frontier Province/Balochistan Urban Rent Restriction Ordinance 1959
• Sindh Rented Premises Ordinance 1979
• Punjab Rented Premises Act 2009
• Cantonment Rent Restriction Act 1963

Rent agreement

A proper written rent agreement is a requirement of law in all four provinces. It was not a requirement under the original West Pakistan Urban Rent Restriction Ordinance of 1959. So, the provinces which still apply the law — Khyber Pakhtunkhwa and Balochistan — didn’t originally have the requirement in their laws. This has now changed because of Restriction of Rented Building Acts in both the provinces.

It is also worth noting that if a rental agreement (in any province) is applicable for more than one year, it stands invalid if it is not written and registered under section 17 of the Registration Act of 1908.

Payment of rent

Rent in all provinces has to be paid according to terms of the tenancy agreement. However, where there is no date fixed for payment, it has to be paid according to the following schedule:

Punjab and Sindh: 10^th of the following month of the date for which it is due.

Islamabad, Khyber Pakhtunkhwa and Baluchistan:  15^th of the month for which it is due.

The judicial authority

The judicial authority appointed to resolve any case relating to rental disputes between the tenant and landlord in the first instance are following:

Punjab: Rent Tribunal

Islamabad, Sindh, Khyber Pakhtunkhwa, Balochistan: Controller of Rents

Fair rent

Punjab Rented Premises Act, unlike the law it repealed (Punjab Urban Rent Restriction Ordinance, 1959), doesn’t define any method for determining a fair rent. It allows the tenant and landlord to determine the rate of rent according to mutual agreement.

Similarly, it does not limit the rent increase either. However, it does make the inclusion of rent and the rate of rent enhancement in the rental agreement mandatory, which has to be registered with the Registrar of Rents. It must be noted that the general practice in Punjab is to increase rent by 10% each year.

Islamabad, Sindh, Khyber Pakhtunkhwa and Balochistan, the Controller can determine the fair rent on the application of a landlord or tenant.

In Islamabad, the rent cannot be increased for a period of three years after the agreement on a rent unless the landlord makes an improvement in the building. At the end of the three year period, however, the rent stands automatically enhanced by 25%.

In Sindh, the rent cannot be increased by more than 10% each year in any case. And there can be no increase for a period of three years if a fair rent has been determined.

Khyber Pakhtunkhwa and Balochistan’s law holds that fair rent is to be determined by the controller. It also provides that the rent can’t be changed for a period of three years after the rent agreement. However, it allows for increase in rent due to improvements made on the premises.

End of tenancy

Have a look at the reason the tenancy may come to an end, and a tenant may be evicted:

In Punjab

• When the period of tenancy has expired.
• Failure on part of the tenant to pay rent on time.
• Breach of terms and conditions outlined in the tenancy agreement.
• Subletting the premises without the consent of the landlord.
• Breach of the obligations outlined in Section 13 of Punjab Rented Premises Act. These include:

1. Keeping the premises in good conditions.
2. Using it for the purpose for which it was rented out.
3. Allowing the landlord to enter premises for the purpose of inspection or repair
4. Not causing a nuisance to the neighbours
5. Not causing a structural change in the premises without landlord’s written consent.

In Sindh

The grounds to evict are more or less the same in Sindh as they are in Punjab. However, the Sindh Rented Premises Ordinance 1979 lists some additional grounds for eviction, including:

• Handing over possession of the premises to some other person.
• Taking such actions that are likely to impair the material value or utility of the premises.
• The landlord requires the building under tenancy to reconstruct it or to make a new construction along with it. After the reconstruction or the new construction is complete, however, the tenant can apply to have the possession of the premises back. He can apply to the controller to allow him to possess such area of the building as may be suitable for the rent he was paying earlier. However, this has to be done before someone else occupies the building.
• The landlord requires the building for his own use – or that of his spouse or children.
• A landlord can demand eviction to use the premises personally:

1. If the landlord is a widow;
2. or, an orphaned minor both of whose parents are dead;
3. or, retired, or will retire in the next six months;
4. or, 60 years of age or will be in the next six months

However, if the landlord was already a widow, minor, retired or 60 when the premises was rented out, the last mentioned ground(s) cannot be used to evict a tenant. Similarly, the provision cannot be utilised if the landlord already owns a premises for personal use.

In Islamabad, Khyber Pakhtunkhwa and Balochistan the laws include all the grounds mentioned for Punjab and Sindh, with one addition being the death of the landlord. In this case the widow or minor children of the landlord can apply to the controller for the eviction of tenant from the rented premises, if it is required for personal use.

The blog tries to address some of the basic questions related to and comparison of the rental laws in Pakistan. Do you have any other questions regarding rental laws? Ask away in the comments.