Tamilnadu Buildings (Lease and Rent Control) Act 1960 (TN Act 18 of 1960 & as amended by Act 23 of 1973 and Act 1 of 1980)
4. 1(1) Fixation of Fair Rent in accordance with the principles set out in the following sub-section:
2. The fair rent for any residential building shall be nine per cent gross return per annum on the total cost of such building
3. The fair rent for any non-residential building shall be twelve percent gross return per annum on the total cost of such building.
4. The total cost referred to in sub-section (2) and (3) shall consist of the market value of the site in which the building is constructed, the cost of construction of the building and the cost of provision of anyone or more of the amenities specified in Schedule I as on the date of application for fixation of fair rent.
Provided that while calculating the market value of the site in which the building is constructed, only that portion of the site on which the building is constructed and of a potion upto fifty percent, thereof the vacant land, if any, appurtenant to such building the excess portion of the vacant land, being treated as amenity.
The cost of provision of amenities specified in Schedule I shall not exceed fifteen percent for any residential building and twenty five percent for any non-residential building.
5. (a) The cost of construction of the building including cost of internal water supply, sanitary and electrical installations shall be determined with due regard to the rates adopted for the purpose of estimation by the Public Works Department of the Government for the area concerned. The controller may, in appropriate cases, allow or disallow an amount not exceeding thirty percent, of construction having regard to the nature of construction of the building.
(b) The controller shall deduct from the cost of construction determined in the manner specified in clause (a), depreciation, calculated at the rates specified in Schedule II.
SCHEDULE – I (See Section 4)
- Air-Conditioner
- Lift
- Water Cooler
- Electrical heater
- Frigidaire
- Mosaic flooring
- Side dados
- Compound walls
- Garden
- Over-head tank for water supply
- Electric motor and pump for water supply
- Play ground
- Badminton and Tennis courts
- Sun-breakers
- Amenity referred to in the first proviso to sub-section (4) of section 4.
- Usufructs, if any enjoyed by the tenant
- Feature of special architectural interest
SCHEDULE – II (See Section 4) RATE OF DEPRECIATION
Type of Building Rate of Depreciation/Annum
- Building built in lime mortar and in which
Teak has been used throughout 1.0 percent
- Building built partly of brick in lime mortar
And partly of brick in mud and in which teak
Has been used 1.5 percent
- Building built in brick in mud and in which
Country wood has been used 2.0 percent
- Buildings which are inferior to those of class 3
With brick in mud unplastered walls and mud
Floors and in which cheap country wood has been
Used 4.0 percent
Explanations. - 1) The depreciation shall be calculated for each year on the net value arrived at after deducting the amount of depreciation foe the previous year.
2). The amount of depreciation shall in no case be less than ten percent of cost of construction of the building.
3). The actual depreciation of building aged “n” years is calculated by using the formula-
P = A (100 – r / 100)n
Where A = Total cost of construction of the building
r = Rate of depreciation per annum
n = Age of the building (i. e. the number of years)
P = The final depreciated value of the building
The amount of depreciation will be equal to ( ‘A’ – ‘P’) subject to a minimum to ten percent of ‘A’.
1 Substituted by Section 6 of Act 23 of 1973
Compiled by
A. Mohammed Ibrahim
Kadayanallur – Tamil Nadu
