Draft Model Tenancy Act: what govt proposes for house owners, tenants

  1. The Ministry of Housing and Urban Affairs (MHUA) has released draft of ‘The Model Tenancy Act, 2019’ in public domain.
  2. Since land and urban development are state subjects, the central Model Act is not binding on the states unless they draft their legislation based on it.
  3. The Model Tenancy Act aims to regulate rental housing by a market-oriented approach. It seeks to promote the creation of a rental housing stock for various income segments including migrants, formal and informal sector workers, students, and working professionals.
  4. The Model Act states that all state rent control Acts should be repealed as the existing rent control laws are archaic.
  5. The draft law proposes to set up Rent authority in every state for the registration of all tenancy agreements. It has also proposed to set up a separate Rent court and Rent Tribunal for resolving tenancy-related disputes.
  6. The law states that both landlord and tenant will have to submit a copy of rent agreement to the district Rent Authority.
  7. The draft law has also proposed hefty penalty for tenants who fail to vacate the rented property after their tenancy has been terminated by order, notice or as per agreement.
  8. The law also states that the landowner has to give a notice in writing three months before revising rent.
  9. It also states that the security deposit to be paid by the tenant should not exceed two months’ rent for residential property, and should be a minimum of one month’s rent for non-residential property.