9 May 2020
What is the Model Tenancy Act?
- It is an Act to establish the Rent Authority for regulating renting of premises in an efficient and transparent manner and to balance the interests of owner and tenant by establishing adjudicating mechanism for speedy dispute redressal and to establish Rent Court and Rent Tribunal to hear appeals and for matters connected therewith or incidental thereto.
Features of the Act
- It intends to notify the rules for residential and non-residential premises and further to develop the policies to promote balanced rental housing by developing different options of rental housing like individual units, dormitories, hostels, co-living, co-housing, paying guest and employee housing and outline the roles of various stakeholders in order to ensure housing for all.
- The definition of `a premise includes residential and commercial premises but excludes premises earmarked for industrial use.
- The new draft Model Tenancy Act, 2019 aims to cap security deposits at two months’ rent for housing and one month’s rent for other properties.
- The Act seeks to penalize recalcitrant tenants for refusing to move out of their rental properties after the agreed-upon rental period expires. The landlord will be able to claim double of the monthly rent for two months and four times of the monthly rent after that as compensation.
- The Act stipulates that a landlord cannot refuse to provide essential utilities and access to common facilities. Further, the landlord will also not be able to increase the rent without giving at least three months’ notice to the tenant, and cannot increase rent in the middle of a rental term.
- Within 2 months of executing the rental agreement, it will be mandatory for both landlords and tenants to intimate to the Rent Authority about this tenancy agreement. The Rent Authority, within 7 days, will issue a unique identification number to both the parties.