All About Model Tenancy Act

Dr Ajay Kumar, Advocate, Supreme Court of India

When it comes to the issue of tenants and landlords, there is a big paradox. On the one hand, we have lakhs of vacant properties and on the other hand,  the government has to launch special drive to provide housing for one and all.

This paradox has been there because of not clearly defined Tenancy Act in the country. The landlords prefer to keep their housing units vacant because of fear of being embroiled in long legal battle with the tenants to get their homes vacated.

Today, approximately 12% of urban houses are vacant, with the share of persons living in urban rental accommodation decreasing from 58% to 27% between 1961 and 2011.

The model Tenancy Act, 2021, which was passed by Parliament, in June, 2021, is an attempt to solve the vexing issue between landlords and tenants. The Act has some important provisions which both landlords and tenants need to keep in mind.

1. The law is applicable prospectivelyand will not affect existing tenancies.
2. It is not applicable on hotel, lodging house, dharmshala, inn, premises for industrial use; premises owned or promoted by the central and state governments, UT, local authority or statutory bodies, premises owned by a company, university or places given on rent to its employees as part of service contract; premises owned by religious or charitable institutions.
3. Rent Authority is to be established to regulate renting of premises and to protect the interests of landlords and tenants
4. Written agreement is a mustfor all new tenancies. The agreement will have to be submitted to the concerned District Rent Authority.
5. The amount to be paid as security deposit by the tenant should not exceed two months’ rentfor residential premises and six months for non-residential premises.
6. Sub-letting of propertymay be made only with the permission of landlord
7. The law also spells out roles and responsibilities of landlord and tenant.
8. The tenant shall not makeany structural changes in the rental premises without the landlord’s consent.
9. No landlord or property manager can withhold any essential supplyto the premises occupied by the tenant.
10. If tenancy has not been renewed,the tenancy shall be deemed to be renewed on a month–to-month basis on the same terms and conditions as in the expired tenancy agreement, for a maximum period of six months.
11. On the expiry of extended period of six months of agreed tenancy period or the termination of tenancy by order or notice, the tenant shall be in default and liable to pay compensation of double the monthly rent for two months and four times of the monthly rent thereafter.
12. The revision ofrent between the landlord and the tenant shall be in accordance with the terms of the tenancy agreement.
13. A landowner or property manager may enter a premise in accordance with written notice or notice through electronic medium served to the tenant atleast 24 hours before the time of entry.
14. Rent Courts and Rent Tribunals to be set up at district level to deal with landlord-tenant grievances on a time-bound basis though no specific timeline.
15. In the case of force majeureconditions such as earthquake, cyclone, war, flood etc., certain advantages and concession shall be provided to the tenant and if the tenant is in the termination period, then leniency of an extra month shall be given for him to have enough time to vacate the premises. In case the premises has been affected so badly due to force majeure condition that it is impossible to reside in it, then the rent shall not be charged till the time the premises has been restored and made inhabitable. 

As evident from its name, the Tenancy Act is a Model Act and its implementation will only come into effect when states make changes in existing age-old rental laws.

Maharashtra, for instance, has decided to partially enforce the provisions of the new Act while the UP cabinet has passed an ordinance accepting the new Act as it is. Some other states, like MP and Chhattisgarh etc. have repelled their existing Rent Control Act to go with the flow of adopting the new law. Depending on the local factors, the states may take RERA route and have specific Tenancy Act, rather accepting the Model Act in toto.

EVENTS                   

The Dream Home Expo, 14-16 January 2022, Lucknow

Annual Facility & Property Management India Summit, 18-19 January 2022, Mumbai

Mumbai International Luxury Property & Residency Conference, 21 January, 2022, Mumbai

Economic Times Acetech 2022, 21-23 January, 2022, Hyderabad

India Property Expo, 22-23 January, 2022, Mumbai

Transit 2022 Urban Mobility, 24-25 January, 2022, New Delhi

Annual Warehousing & Inventory Optimisation Summit, 24-25 January, 2022, Mumbai

Infrastructure Development Architectural Construction, 27-29 January 2022, Mumbai

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