2020 was a tumultuous year. Many weathered the storm, but others struggled, especially during the COVID-19 economic downturn. Many tenants found themselves unable to cover their rent, leading to landlords facing revenue shortfalls. Enter the Model Tenancy Act. So, what’s it all about?

The Model Tenancy Act Uncovered

A primary objective of the Model Tenancy Act is to foster a balanced renting ecosystem for both landlords and tenants. To address and rectify pressing issues, the act introduced a Rent court and Rent tribunal. Some states, however, have the flexibility to modify the prescribed law.

The Act’s Origin and Purpose

Although renting seems straightforward, did you know over 110,000 homes remain vacant in urban regions? That’s mainly due to an inadequate rental policy, compounded by issues like far-off locations and a lack of amenities.

For migrant workers, the challenges were exacerbated during the COVID-19 pandemic, with many returning to their hometowns due to unavailability of city accommodation.

The inception of the Model Tenancy Act 2021 was a culmination of several factors, even preceding the ‘Housing For All by 2022’ initiative. An early emphasis on renting arose from a 2014 rental housing report, stressing the significance of affordable renting in India.

The Act’s Key Highlights

  • Written contracts are mandatory for all rentals, covering both rural and urban areas.
  • The introduction of the Rent Authority, Rent Tribunal, and Rent Court promises resolution within 60 days.
  • Deposits for residential properties are capped at two months’ rent.
  • Landlords and tenants must agree on rental property modifications.
  • New measures ensure that landlords give 24-hour notice before property visits, only during reasonable hours.
  • Rent hikes during the lease term require a three-month advance notice and a clause in the rental agreement.
  • Structural maintenance responsibility lies with landlords.
  • Rental disputes will now involve an officer of deputy collector rank or higher for mediation.

Impact on the Rental Market

The unoccupied properties across urban India, paired with the lack of a clear rental framework, has often led to inflated rental rates. The Model Tenancy Act aims to address these issues, enabling the rental market to thrive and potentially achieve the vision of housing for everyone.

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Frequently Asked Questions

What do tenants stand to gain?

Tenants enjoy non-intrusive landlords, a two-month rent cap on deposits, three months’ notice for rent increases, and landlords taking charge of structural maintenance.

What’s the core aim of the Model Tenancy Act?

The act seeks to streamline renting, making it beneficial for tenants and landlords alike, and includes the establishment of a Rent court and Rent tribunal for grievance redressal.

What if there’s no tenancy agreement?

Tenants without written contracts still enjoy all standard rights, including essential amenities, but must ensure timely rent payments and proper property care.

Insights on security deposits under the new law?

Unlike cities where landlords demand hefty deposits, the Model Tenancy Act limits this to two months’ rent in compliant states.

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