The Model Tenancy Act aims to boost rental housing in the country and reduce litigation. The Union Cabinet, chaired by Prime Minister Narendra Modi, on 2nd June approved the Model Tenancy Act. It aims to bridge the trust between tenants and landlords by clearly stating their obligations. Model Tenancy Act will help unlocking of vacant houses for rental housing purposes. It is expected to get private participation in rental housing as a business model for addressing the problem of huge housing shortage.
Some of the features of the Model Tenancy Act are-
- The Model Tenancy Act aims to create a sustainable rental housing market in the country. This will enable creation of adequate rental housing stock for all the income groups thereby addressing the issue of homelessness.
- This act will enable institutionalisation of rental housing by slowly shifting it towards the formal market.
- Under the Model Tenancy Act a rent authority will also be established to regulate renting of premises and to protect the interests of landlords and tenants. The authority will also provide speedy mechanism for resolution of disputes and matters between the landlord and the tenant.
- Under this act the maximum limit for security deposit for residential premises is 2 months and for commercial property is 6 months.
- Another crucial point in the act is regarding vacating the premises. The Model Tenancy Act says that if a landlord has fulfilled all the conditions as mentioned in the rent agreement – giving notice etc – and tenant fails to vacate the premises on the expiration of the period stated in the rent agreement, the landlord is entitled to double the monthly rent for two months and four times after that.
- It has also stated in detail the rights and obligations of both landlord and tenant and has also dealt with many issues which can lead to disputes between the landlord and the tenant.
- This act gives the right to the landlord to enter the premise in accordance with a written notice or a notice served electronically to the tenant at least 24 hours before. The reasons for entry can be-
- To carry out repairs or to get work done in the premise.
- To carry out inspection in the premise to check if it is in a habitable state or not.
- For any other reason specified in the tenancy agreement.
- Separate rent authorities, courts and tribunals will be set up in districts to protect the interests of both the tenant as well as the landlord.
Responsibilities of the landlord-
- Structural repairs except damages caused by the tenant.
- White washing of walls.
- Changing plumbing pipes when necessary.
- Electrical wiring related maintenance whenever necessary.
Responsibilities of the tenant-
- Drain cleaning.
- Socket repairs.
- Replacement of glass panels in doors and windows.
- Maintenance of garden.
- Must not intentionally damage the premises.
- Must notify landlord of any damage as soon as possible.
In my opinion this law can grow the rental housing supply by attracting investors, and more stock will help students, working professionals, and migrant populations to find urban accommodation, especially in Covid-like exigencies