June 3, 2021

The Central government on June 2, 2021 gave acceptance to the Model Tenancy Act, a move that is likely to overhaul the legal framework concerning rental housing across the country.

Hardeep Singh Puri, the Minister of Housing and Urban Affairs, said the Act will promote rental housing in the country, adding that “1.1 crore vacant houses available on rent will compliment PM’s vision of ‘Housing for All’ by 2022”.

The government had first released the draft of the MTA in 2019. The Act aims to bridge the trust deficit between tenants and landlords by clearly delineating their obligations.

Besides, The Act is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage, the Ministry of Housing said.

Here are the key features of the Model Tenancy Act:

  • The Centre has claimed that the MTA act will balance the interest and rights of both the owner and tenant in an accountable and transparent manner.
  • The Act will encourage the growth of rental housing as it is a preferred option for different segments including migrant workers, professionals, and students.
  • The Model Tenancy Act will provide a model for urban and rural properties, as well as a template for residential and commercial properties.
  • The Housing and Urban Affairs ministry said the MTA act would take people from informal to specific contract arrangements between landlord and tenant.
  • In case of dispute between landlord and tenant, a rent authority, or a rent court would be available for speedy resolution.
  • A tenant will have to submit a security deposit of two months for residential premises. For commercial property, a tenant will have to pay six-month rent.
  • The tenant cannot sublet a part of or the whole property to someone else.
  • Further, the Act says if a landlord has fulfilled all the conditions stated in the rent agreement – giving notice period, etc, and the tenant fails to vacate the premises on the expiration of the period of tenancy or termination of tenancy, the landlord is entitled to double the monthly rent for two months and four times after that.
  • Under this Act, the landowner would give a notice in writing three months before revising rent. The landlord cannot hike the rent in the middle of the tenure.
  • According to the MTA Act, a landowner cannot cut power and water supply in case of a dispute with the tenant.
  • The Act states that a landowner cannot enter the rented premises without 24-hour prior notice to carry out repairs or replacement.
  • Landlord will be responsible to repair structural damages and undertake measures like whitewashing walls and painting doors and windows.

Read Act text

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