Draft model tenancy law proposes cap on security deposit, appointment of rent authority

  1. The Union Housing and Urban Affairs Ministry has put the draft of ‘The Model Tenancy Act, 2019’ in public domain.
  2. It must be noted that this is only a model act because since land is a state subject, states have the right to either adopt it or reject it.
  3. The aim of the Act is to balance the interest and rights of both the owners and tenants. It seeks to create an accountable and transparent ecosystem for renting the premises
  4. 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.
  5. The rent authority will be headed by a deputy collector-rank officer, and will be set up by district collectors with the approval of the respective state governments.
  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. The model law has also fixed the security deposit to be paid by the tenant in advance, which will be a maximum of two months’ rent in case of residential property, and a minimum of one month’s rent in case of a non-residential property.
  10. According to the proposed law, a landowner cannot cut power and water supply in case of a dispute with the tenant.