Wondering what’s the fuss about the newly approved Model Tenancy Act? Here is an article that tells you everything you need to know about it and how it benefits the rental housing sector in India.
- What Is The Model Tenancy Act?
The Model Tenancy Act (MTA), 2021 is a legal framework approved by the government that serves to amend the existing rental laws in India. According to the 2011 census, over 1 crore vacant units were lying unused in the country.* Between 2011 and 2021, this number has only been expected to grow as many developers have unsold inventory on their hands now. The MTA aims to unlock these units for renting purposes.
This move by the government will not only provide housing for the populace migrating to the cities for work but also reduce housing shortage, thus hoping to achieve the dream of ‘Housing For All by 2022’ Moreover, many of the act’s provisions will promote private participation, improve transparency in rental agreements, and help improve landlord-tenant relations.
- What Are Some Provisions of The MTA Act?
The MTA act is now set to be circulated to all the states where rent authorities, as well as rent courts, are to be set up in the cities. According to the Minister of Housing & Urban Affairs, Hardip Singh Puri – the states will have primary jurisdiction in amending and enacting many of the provisions of the act. Here are some provisions set in the act that one needs to know –
- A written agreement will be drafted between the owner and tenant, which will be submitted to the district’s rent authority.
- The maximum security deposit for residential properties will be the rent of two months. For commercial premises, it is six months.
- The landlord will be responsible for structural repairs such as whitewashing of walls, repairing electrical wiring, changing the plumbing pipes, and such. This does not include damages caused by the tenant, as those repairs will be coming out from the tenant’s pocket.
- Maintenance of kitchen fixtures, drain cleaning, and other spaces in the premises are the responsibility of the tenant.
- During the ongoing agreement period, tenants cannot be evicted without prior notice. Only an agreement by both parties in writing will work for eviction if the tenant wants to move out before the agreement ends.
- Rent revision is permitted as per the terms set in the rent agreement. If it is not mentioned in the agreement, the owner of the property should send a notice of the revised rent to the tenant three months in advance.
- If the tenant does not give a termination notice, then they must pay the revised rent.
- In case the tenant has not vacated the premises after termination, they are liable to pay double the monthly rent for two months and then four times the monthly rent after that.
- In case of any discord, the concerned parties can first approach the rent authorities for solutions. If one is not satisfied with the provided resolution, they can further approach the rent court, which is to pass an order within 60 days after receiving the complaint. After the rent courts are set up, civil courts will not have jurisdiction over disputes related to rental housing.
- This act will not affect existing tenancies.
- How Will The MTA Act Benefit Tenants?
The act provides provisions where tenants will not be taken undue advantage of by the landlord. From putting a cap on the maximum security deposit that can be collected to the regulation of rent hikes – this act allows tenants to ensure affordable accommodation for themselves. This act also provides regulations on landlord intrusions, where the owner has to provide a written notice 24 hours before visiting the premises. They also cannot visit before 7 am and after 8 pm.
- How Will The MTA Act Benefit Landlords?
This act allows landlords to discourage tenants from overstaying. They can successfully take the help of the rent courts to get tenants evicted who refuse to vacate or have not paid the rent for two months in a row. The act also ensures that tenants can’t sublet part of the rented accommodation to anyone else, without prior permission from the owner.
At Ashwin Sheth Group, we’ve ensured that you are familiar with the general particulars of the Model Tenancy Act. This will help you make informed decisions whether you are a landlord or a tenant, before entering into a tenancy agreement.