Model Tenancy Act

Model Tenancy Act

 

  • According to the Ministry of Housing and Urban Affairs (MoHUA), the Model Tenancy Act has been amended so far by only four states, Andhra Pradesh, Tamil Nadu, Uttar Pradesh and Assam.

Requirement of Model Tenancy Act:

  • The existing rent control law is hindering the development of rental housing and it discourages landlords from renting out their vacant houses for fear of them being re-occupied.
  • Possible measures to rent out vacant houses include bringing transparency and accountability to the existing tenancy system and judiciously balancing the interests of both the property owner and the tenant.
  • According to the 2011 census, more than 1 crore houses are lying vacant in urban areas.
  • Earlier, about one-third of all Indians were living in urban areas, the proportion of which increased from 27.82 percent in 2001 to 31.16 percent in 2011. By the year 2050, more than half of India’s people will be living in cities or towns, mainly due to migration.

Model Tenancy Act:

  • The Model Tenancy Act, 2021 aims to establish a Rent Authority to regulate the rent of premises and to protect the interests of landlords and tenants and to provide a speedy adjudication mechanism for settlement of disputes and matters connected therewith or connected therewith.
  • It aims to create a vibrant, sustainable and inclusive rental housing market in the country.
  • It will enable construction of adequate rental housing for all income groups, thereby solving the problem of homelessness.
  • It will enable institutionalization of rental housing by gradually shifting towards the formal market.

Major Provisions:

 Written Agreement Mandatory:

  • For this it is necessary to have a written agreement between the owner and the tenant of the property.

Establishment of Independent Authority and Rent Court:

  • The Act establishes an independent authority in each state and union territory for the registration of tenancy agreements and even sets up a separate court to settle tenancy disputes.

Maximum limit for security deposit:

  • In this Act, the Advance Security Deposit of the tenant has been limited to a maximum of two months of rent for residential purposes and a maximum of six months for non-residential purposes.

Describes the rights and obligations of the landlord and tenant:

  • The landlord will be responsible for structural repairs (not damage caused by the tenant) such as whitewashing the walls, painting the doors and windows, etc.
  • Tenant will be responsible for drain cleaning, repair of switches and sockets, replacement of glass panels in windows, doors and maintenance of gardens and open spaces etc.

24 hours prior notice by landlord:

  • Landlord must give 24 hours prior notice before entering rental premises to make repairs or replacements.

Mechanism to vacate the premises:

  • If a landlord has fulfilled all the conditions mentioned in the rent agreement such as giving notice etc. and the tenant fails to vacate the premises on the period or expiry of the rental, the landlord is entitled to double the monthly rent.

Importance:

  • The authority established under this Act shall provide an expeditious mechanism for resolving disputes and other related matters.
  • The Act will help in overhauling the legal framework regarding rental housing across the country.
  • It is expected to encourage private participation in rental housing as a business model to address the acute housing shortage.

Challenges:

  • This Act is not binding on the states as land and urban development are state subjects.

Yojna ias daily current affairs eng med 8th August

 

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