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June 12, 2021
Model Tenancy Act to be Introduced for Sustainable Rental Housing Market: Maharashtra

Model Tenancy Act: Decoded

Model Tenancy Act (MTA) is meant to streamline the process of renting a property in India and boost the rent economy in the estate sector. The Model Tenancy Act aims at developing a sustainable, vibrant and inclusive rental housing sector in the country. The move will ensure the development of required rental housing units for all age and income groups thus, catering to the issue of homelessness.

Why Recently In News

The central government has given a nod while approving the long-pending Model Tenancy Act and is sent to the States and UTs to amend laws or enacting legislation on rental Realty. The act is tabled in view of overhauling the legal framework with respect to rental housing across the country.

Why Needed

As per data of Census 2011, approximately 1.1 crore residential spaces were lying vacant in the country and to suffice the increasing housing demands these curated living spaces are to be made available on rent will complement the vision of ‘Housing for All’ by 2022.

The Act Aims At

The Model Tenancy Act aims at developing a sustainable, vibrant and inclusive rental housing sector in the country. The move will ensure the development of required rental housing units for all age and income groups thus, catering to the issue of homelessness.
The implementation of the Act will also facilitate the opening of vacant living spaces to suffice for rental housing needs.
Furthermore, it is believed to transform the rental housing sector by giving a fillip to private player’s stake in the rental housing sector as a business model for addressing the huge housing crunch.

Coverage of The Act

The Act is applicable to premises let out for, commercial residential or educational purposes, while it barred the space used for industrial purposes.
The Act is not also applicable to, lodging houses, hotels and suits-inns, etc.
The Act will take care of existing tenancies as It is going to be implemented prospectively and will exclude existing tenancies for now.

Some Key Provisions

1. Not a Verbal Agreement Anymore Between Landlord-Tenant

Written Agreement is Mandatory from now on for there to be drawn between the property owner and the tenant specifying the tenure and security cost very clearly.

2. Establishment of Rental Housing Court

Establishment of rental housing court in every state and UT for processing of tenancy agreements and to take up tenancy related issues.

3. Clear Line between Rights and Duties of both Property Owner and Tenant

  • The landlord is bound to fix issues related to structural damage except those damage caused by the tenant, plus the Law also enforces the landlord to take on tasks like the whitewashing of walls and painting of doors and windows under his expenses only and is not to be taken care of by the tenant.
  • However, the tenant since using the rented space is bound to take on tasks like drain cleaning, switch repair and socket repairs, kitchen fixtures repairs, change of glass panels in doors, windows and maintenance of open gardens and open spaces as well.

4. Prior Notice of 24-hour by the Landlord

A landowner is bound to provide at least 24-hour prior notice before entering the rented premises for carrying out repair works or fixations.

5. Lawful Mechanism for Vacating the rented premises

  • When a landlord has checked on all the conditions checks as specified in the rent agreement. Given the lawful mechanism if the tenant fails to vacate the rented premises on the expiration of the period of tenancy, then clearly the landlord is entitled to double the monthly rent for two months and four times for the next one.

Conclusive Thoughts:

  1. The Act will grant enough powers to authority to ensure a speedy resolution in disputes and other rent related matters.
  2. The Act will ensure to revamp the legal framework with respect to rental housing across the country.
  3. It will enable the institutionalization of the rental housing sector by gradually inclining it towards the formal Realty market.
  4. It is expected to provide a stimulus to private player’s stake in the rental housing sector.

Since the Land is a subject of state and not of the centre which means that the centre cannot impose the law on the state. In a view of that, the Maharashtra state housing department’s official stated that the Model Tenancy Act is under consideration and is undergoing a thorough study of the document, to ensure how best it can be implemented in the interest of the people.

However, Mr Shantilal Kataria, CREDAI authority, stated that the act would promote the rental segment in the state. He further stated that the act would protect the interest of both tenants and owners and ensure a speedy redressal mechanism for the fixing of disputes.

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