I.Protection of Occupants Bill: The government has introduced two Bills, namely, the Rent (Repeal) Bill and the Protection of Occupants Bill which – if enacted – will have the effect of radically reforming the rent laws of our country. These two Bills were gazetted in September 2025 and tabled in Parliament on 20^th January, 2026. Although several petitions were filed before the Supreme Court, challenging the constitutionality of these Bills, the Attorney-General informed the court that the two Bills would not be proceeded with in their present form, but would, instead, be referred to an expert committee for consideration. Accordingly, the petitions were withdrawn and the Supreme Court informed the Speaker that no formal determination would be made on the constitutionality of the said Bills in their present form. In parallel to these legal developments, the Ministry of Justice and National Integration has requested the members of the public to submit their comments, suggestions, or proposals regarding these Bills by 04^th March, 2026. The Minister of Justice has also assured that he would not take any steps in relation to the two Bills until this consultative process is completed. Therefore, a clear need and opportunity has arisen for a vibrant public discussion on the proposed legislation. The purpose of this lecture is to contribute to this discussion by assessing the strengths and weaknesses of the two Bills in light of their historical, political, social and economic context.

II. The Rent Act and its objective

The Rent Act No. 7 of 1972 is a landmark piece of legislation which was introduced by Mr. Pieter Keuneman, the Minster of Housing at the time. The purpose of the Act was to confer significant protection on tenants through means such as restricting the increase of rent, giving security of tenure for the tenant and formalising the process of ejectment. The Rent Act of 1972 was a bold response to the lived realities of law in society. From a doctrinal perspective, the formation of a valid contract requires animus contrahendi (the intention to enter into a contract). However, it is widely acknowledged that parties to a contact may not be equal in terms of bargaining strength. One party may be stronger than the other, both economically and socially. In such situations, the function of the law is to protect the weaker party in his dealings with the stronger party. The assumption underlying the Rent Act was that the landlord was in a far stronger position than the tenant. Thus, the law was utilised to protect the interests of the more vulnerable party, namely the tenant. This objective of the Rent Act also closely aligned with the personal philosophy of Mr. Keuneman who was a prominent member of the Communist Party, of Sri Lanka. While the Rent Act was subsequently amended in 1976, 1977, 1980 and 2002, the original legislative scheme which safeguarded the rights of the tenants remained intact. What is proposed under the Protection of Occupants Bill, however, is a fundamental departure from the premises of that law.

III. Protection of Occupants Bill: An Overview

A close comparison between the Rent Act and the Protection of Occupants Bill shows that the safeguards afforded to the occupants under the latter (Clauses 3 (a), (b) and 4) are almost identical to the provisions of the former (Sections 13(1), 15 and 16). They both prevent the landlord from discontinuing or withholding the amenities previously provided to the tenant; damaging the premises to induce or compel the tenant to vacate the premises; and refusing to maintain the premises in proper condition. Yet, there is one crucial difference between the Rent Act and the Protection of Occupants Bill in relation to these safeguards. The rights and privileges enjoyed by a tenant under the Rent Act are not absolute. The tenant is being protected by the law only so long as he is complying with the terms and conditions of the tenancy agreement. The 1972 Act, therefore, operates on the assumption that a tenant is honouring his contractual obligations while enjoying the rights under the Act. The conditional nature of these safeguards is amply evident from the provisions of the Act.

For example, section 15 of the Rent Act prevents the landlord from discontinuing amenities provided to the tenant ‘without reasonable cause’. Thus, the landlord is not prevented from discontinuing the amenities at all times but only without reasonable cause. The breach of the contractual obligations by the tenant would surely constitute a reasonable cause for the landlord to discontinue the amenities provided by him to the tenant. By contrast, the language used in the Protection of Occupants Bill does not indicate any limitations on the exercise of the safeguards afforded by the Bill except the preliminary requirement under clause 2 that undisturbed and uninterrupted occupation for three months is necessary for the application of the Bill. In other words, any person who has been in lawful occupation of premises for three months acquires an accrued right to enjoy the safeguards mentioned in the Bill unless he is stopped from doing so by a court order.

Consequently, even if the tenancy agreement between landlord and tenant may have come to an end or the tenant may be in breach of the terms of the agreement, or he is using the premises for a completely different purpose, his rights and privileges remain unaffected. Recourse to the judicial process is the only avenue available for the landlord to revoke the safeguards given to the tenant even when the latter has blatantly breached the terms of his contract. Reciprocity and mutuality are the fundamental concepts that underlie the Rent Act, as the tenant’s protection under that Act is dependent on the reciprocity of obligations. Protection of Occupants Bill, on the other hand, provides a unilateral framework for the tenants to assert their rights without paying due regard to the interests of the landlord.

It is also important to mention, at this point, that the Protection of Occupants Bill makes an artificial and unjustifiable difference between the right of a tenant not to be ejected and the other safeguards provided to him under the Bill. In terms of clause 5, the landlord shall not eject an occupant in contravention of the terms and conditions of the lease agreement, or tenancy agreement. The necessary implication of this clause is that the landlord can eject an occupant in terms of the agreement between him and the tenant. Such a caveat is absent in the other provisions of the Bill that deal with the rights of an occupant.

Accordingly, there is a blanket prohibition on the landlord in discontinuing or withholding the amenities previously provided to the occupant or refusing to maintain the premises in proper condition. The landlord cannot take these actions even as per the agreement to which the tenant himself has given his consent. Apart from the absence of a rational basis to require the landlord to follow the tenancy agreement in ejecting a tenant but then to prevent him from doing the same with regard to the other less severe actions that he can resort to when the tenant is in breach of the contract, such a distinction also creates unfairness and inequality. Ejection of a tenant requires manpower and therefore, monetary resources as well. While a landlord who is capable of affording personnel to eject his tenant is benefited under the Bill, a landlord with modest means is left with no options other than a lengthy and cumbersome judicial process even when it is abundantly clear that his tenant is in violation of the tenancy agreement.

IV. Internal Inconsistencies in the Bill

The Protection of Occupants Bill is also poorly drafted and, thus, contains several internal inconsistencies. For example, clause 2 of the Bill provides that a person must be ‘in lawful occupation of a premises’ for him to invoke the provisions of the Bill. The term ‘occupation’ is defined in clause 13 which states that a person can be in occupation of a premises only ‘with the consent of the landlord.’ If a landlord has taken the actions mentioned above, such as discontinuing the amenities, the ‘aggrieved occupant’ is entitled to institute an action in a Court,

seeking the reliefs specified in that clause. Paradoxically, however, when a person goes to the Court to institute such actions, he is no longer ‘an occupant’ because all the eventualities against which a court order can be obtained, such as discontinuing amenities, refusing to maintain the premises, damaging the property, or ejecting the occupant, give an unmistakable indication that the person affected does not have the consent of the landlord to stay in the premises anymore. The withdrawal of the landlord’s consent is the irresistible conclusion that can be drawn from the aforementioned actions or omissions. Therefore, according to the definition of ‘occupation’ in clause 13, no person, who has faced the resistance of the landlord in the manner described in the Bill, can institute an action before the Court as he is no longer an ‘occupant’ with the landlord’s consent to stay in the premises.

V. A flawed rationale?

In addition to these structural flaws in the Protection of Occupants Bill, the rationale behind the same can also be questioned. It seems that the aim of the Bill is to bridge the gap between Haves and Have nots. It is assumed that the tenant is weaker than the landlord, both economically and socially. Thus, the Bill seeks to protect the rights of the weaker party i.e. the tenant from the arbitrary actions of the landlord. This is an extension of the political philosophy that influenced Mr. Keuneman to introduce the Rent Act. However, due to the unqualified protection given to the tenant, under the proposed new law, there is a serious question as to whether this political philosophy can truly be realised if the Bill is to be enacted in its present form. Suppose that there is a government servant who wants to build a house for his daughter. He may not be rich but manages to buy a land and build a house for his daughter with his salary. He may also want to rent the house until the daughter is married and collect the rent for his daughter’s marriage.

If the tenant, who lives in this house, stops paying the rent and also refuses to leave the property, there is nothing that this government servant can do except seeking a court order to eject him by spending more money and engaging in a lengthy trial that may take years to reach a final determination on the matter. He, of course, does not have the manpower to eject the tenant, but the Bill prevents him from engaging in unharmful actions, such as discontinuing amenities or refusing to maintain the premises, as well. He cannot collect the rent nor can he give the property to his daughter. In such a situation, the landlord becomes the victim as the Protection of Occupants Bill enables the tenant to abuse his rights. The theory of haves and have nots, which is supposed to be promoted by the Bill, breaks down at this point. The assumption that the have nots will be protected by this Act when they are pitted against the haves is simply not borne out when the provisions of the Bill are subject to pragmatic considerations of this kind.

VI. Impact on Banks

The Protection of Occupants Bill will also have a negative impact on the banking system of our country. Landlords often put their houses up as collateral for bank loans. Under the Recovery of loans by Banks (Special Provisions) Act No. 4 of 1990, the bank is empowered to sell such property at a public auction if the landlord fails to pay the money back to the bank, with the stipulated interest. It will be extremely difficult for the bank to exercise this right if the Protection of Occupants Bill is enacted without any amendments. Under the provisions of the Bill, a tenant may refuse to leave the premise, despite the breach of his contractual obligations. The bank then cannot sell the property with a tenant as it lacks vacua possessio (vacant possession). In any event, no person will buy a house with a tenant, specially when he knows that the presence of the tenant cannot be resisted under the proposed law. Thus, the bank loses its money due to its inability to sell the collateral and by extension, the members of the public, who deposited their money in the bank, will also suffer that loss.

VII. Impact on Condominium Property

With the increase of population in the urban areas, condominium property has become a convenient option for people who are looking for housing in major cities like Colombo, Kandy and Galle. Unfortunately, the Protection of Occupants Bill is bound to have a detrimental impact on at least three parties in a condominium. First, if the tenant of an apartment in the condominium does not pay his rent, the landlord, who owns the condominium, and expects to earn a certain profit from it, is undoubtedly affected. If a considerable number of tenants refuse to pay the rent, it will be difficult for the landlord to continue with his business. Second, in every condominium complex, there is a management committee which looks after the amenities and other facilities given to the apartments in that complex. However, if a tenant breaches the terms of his contract, the managers will be in a precarious position where they are compelled, under the proposed law, to provide those facilities to someone who has not honoured his contractual obligations towards to the maintenance of the condominium. Finally, the other residents in the condominium complex will be subject to grave injustice as there is a tenant who is immune from any deterrence for the breach of his contract while they continue to pay the rent and fulfil other obligations. Therefore, the condominium industry will severely be affected in multiple ways if the Protection of Occupants Bill is enacted in its current form.

VIII. Judicial process

The proponents of the Bill argue that the aim of the Bill is simply to formalise the actions that can be taken by the landlord when the tenant is in breach of the terms of his contract. It is, therefore, pointed out that if a tenant goes to the Court against the actions of the landlord, such as discontinuing the amenities or refusing to maintain the premises in proper condition, the latter can justify his actions by referring to the breach of the tenancy agreement. In fact, clause 7 (4) lays down time limits for the completion of cases that arise under the proposed legislation. In an uncontested case, the Court is required to deliver the final judgment within 3 months and if the claims of the occupant are contested by the landlord, 9 months are given for the completion of the case. What these provisions seem to have overlooked is the backlog of cases in District Courts which will be dealing with such cases if the Bill is enacted. It is highly doubtful whether these time limits can be adhered to by the District Courts in the midst of other civil actions, such as testamentary cases, divorce cases and property disputes which occupy a significant portion of the Courts’ daily schedule. In any event, a person aggrieved by an order of the court can appeal and no time limits have been prescribed for the appeal process. Most importantly, under clause 6(2), an occupant can obtain interim relief to maintain the status quo of the premises. The effect of this provision is that even an occupant, who is in breach of his contract, can obtain an interim order to maintain the status quo and thereby prevent the landlord from enforcing the contract until the completion of the case. It is convenient for the lawmakers to lay down time limits for cases in a statute but as the previous experiences have shown, the implementation of such limits, in practice, is exceedingly difficult.

IX. Social Impact

The Protection of Occupants Bill is likely to have a catastrophic impact on the social fabric of our country. With all the above hazards discussed above, nobody will buy a house and rent it out anymore. Renting a house, under the proposed legislation, will become a considerable risk which only very few people will be prepared to take. Consequently, there will be a drastic reduction of the housing stock and the number of houses and apartments available will fall drastically. In response, there will be an inevitable rise in rent values. The objective of the Bill to protect the rights of the tenants is most certainly commendable. However, the function of the law is to balance competing interests in society without conferring undue advantage or disadvantage on a particular social group. As former Dean of the Harvard Law School, Roscoe Pound, has argued, making of law is an exercise in social engineering. Law must balance different interests in society and come up with an equitable solution. However, the proposed legislation leads to unfairness towards landlords, banks, dispositors and several parties in condominiums. From all these perspectives, impact of the proposed legislation is negative. The cumulative effect of all these consequences makes the Protection of Occupants Bill a counter-productive law which fails to achieve its purpose. Therefore, significant amendments are required before the proposed Bill is enacted into law.

Guest lecture delivered in the Faculty of Law, University of Colombo,
by Emeritus Professor G. L. Peiris
on 16 February, 2026