Model Tenancy Act, 2021

Tue, 06/29/2021 - 00:00



According to industry estimates, over 11 million homes are estimated to be vacant across the country and we believe that these flats would now come into the rental market and help reduce housing shortages.

Young, educated job seekers migrating to large metropolises often complain of onerous tenancy conditions and obscene sums of money as security deposits that they are asked to fork out to lease accommodation. In some cities, tenants are asked to pay security deposits amounting to 11 months of rent. Also, some house owners routinely breach tenants’ right to privacy by visiting the premises unannounced for sundry repair works. Whimsical rent raises are another problem for tenants, many of whom complain of being squeezed as “captive customers“. Besides, Tenants are often accused of “squatting” on the rented premises, or trying to grab the property.

Implementation of Model Tenancy Act, 2021 will encourage the private sector to develop housing projects for rent purposes and also bring a huge stock of vacant flats in the rental market.

Features of the Model Law: 

  1. Applicable prospectively and will not affect the existing tenancies. 
  2. Written agreement is a must for all new tenancies. The agreement will have to be submitted to the concerned district ‘Rent Authority’. 
  3. The law also speaks about roles and responsibilities of landlord and tenants. 
  4. No landlord or property manager can withhold any essential supply to the premises occupied by the tenant. 
  5. 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 were in the expired tenancy agreement, for a maximum period of six months. 
  6. Compensation in case of non-vacancy: 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 a tenant in default and liable to pay compensation of double of the monthly rent for two months and four times of the monthly rent thereafter.  
  7. A landowner or property manager may enter a premise in accordance with written notice or notice through electronic medium served to the tenant at least twenty-four hours before the time of entry.   

Dispute Redressal System:

If a dispute emerges between the owner and tenant, they will have to first approach 'Rent Authority'. If any party is not satisfied with the Rent Authority's order, 'Rent Court' can be approached, followed by a final and then 'Rent Tribunal'.

However, as land is a state subject the MTA is not mandatory for the states to implement; states and union territories can adopt the Model Tenancy Act (MTA) by enacting fresh legislation or they can amend their existing rental laws suitably. As the rules are not binding, states would hardly be in a hurry to embrace it given the fact that political expediency may be a factor in consideration.