Model tenancy law to help attract institutional investments in rental housing: Report

News:According to a report,the proposed model tenancy law will be instrumental in institutionalising rental housing in the country and tap huge potential in this segment as over 11 million homes are vacant in urban areas.


Draft of Model Tenancy Act, 2019:

  • The Act aims 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
  • 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.
  • 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.
  • The law states that both landlord and tenant will have to submit a copy of rent agreement to the district Rent Authority.
  • 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.
  • The law also states that the landowner has to give a notice in writing three months before revising rent.
  • 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.

Note: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.