Model Tenancy Act 2019 To Propel Real Estate Rental Housing Sector

A massive figure of 11.9 million houses remains vacant in India, as stipulated for a credible tenancy law. The homeowners are threatened due to the encroachment of the property and defaulting rents by the tenants.

This concern is best addressed by the Model Tenancy Law 2019, which has a frame of rules and regulations for both the owners and the tenants.

The model tenancy law brought by India’s government is an initiative to instill confidence in residential property owners. It puts a check on both the owners and the tenants. It is planned to boost the rental housing sector to fulfilling the government’s aspirations of affordable housing for all by 2022.

Draft Model Tenancy Act 2019 Key Highlights

Establishment of Rent Authority

The government is planning to establish the Rent courts and Rent tribunals to resolve the tenant’s and the owners’ issues at the earliest. With the state/UT government’s approval, the district collector appoints an officer, not below the Deputy collector who acts as rent authority. The designated officer acts as rent authority for the area within the jurisdiction to which the act applies.

The state/UT government may further evaluate and notify the rent courts and tribunals’ establishment as per the necessity. These rent courts hold the sole right to hear and decide on disputes between the owners and the tenants, and no civil court has the right to interfere anymore.

This reduces the burden on the civil courts and also speeds up the process of resolving disputes. It is said that a case of eviction takes approximately a decade to fight over, win, and evict a dishonest tenant. But the rent courts and tribunals are ordered to dispose of the case within 60 days. Any delay in doing so has to be supported with valid reasons in writing by the rent court, which increases the system’s efficiency.

Provisions to the Landlords and Tenants

After the act’s enforcement, all residential and commercial premises shall be rented after a written agreement. A copy of the same is to be submitted to the rent authority within two months of the agreement’s date. This ensures transparency in the deals and reduces disputes due to the forgery of the accords.

The law also states that if the owner wishes to increase the rental charges, he may only provide notice before three months to tenants. The owner and tenant also have to agree on the increase in the costs. If you as a tenant do not respond to the notice, you are deemed to accept the charges increase.

Issuing a notice before increasing the rent on an agreement basis protects the tenants from paying excessive charges. It gives an opportunity and takes into account the tenant’s opinion, which increases trust.

According to the law, due to any dispute, if the landowner does not accept the rent or other payables in cash or postal or money order, the tenant may deposit with the rent authority for consecutive two months. Once the money is deposited with power, it proceeds with the case and investigates it. This provision protects you from the gimmicks of the landlords.

Orders for Property Maintenance

Maintenance of the property must be the priority, but as nothing comes for free, the repair costs increase with time. If the landlord does not agree to get the repairs done, then you may get the repairs done and deduct the charges from the rent paid to the landlord. It ensures that the tenants are enjoying the facilities worth every penny they are paying for.

The tenant will be primarily responsible for drainage cleaning, socket repairs, kitchen fixture repairs, maintenance of commonly used open spaces, replacement of glasses for windows and doors, and so on unless specifically mentioned otherwise. If you do not wish to repair the premises in the above case, you may vacate the property. You can hand over the property to the landowner after producing a written notice of 15 days or the rent authority’s permission. Any damage caused by the tenant due to negligence or intentionally, he/she will be liable for the same.

Directions for Essential Services

Any essential supply or service cannot be interrupted by the tenant or landlord under any circumstance. The essential collection includes water supply, electricity supply, gas supply, sanitation links, elevators, staircase, etcetera. If it is done, then on a complaint filed by the end-user, the rent authority restores the supply after inspecting the matter. In case anyone is found guilty of the offense, the rent authority holds the right to penalize the person.

If you do not deposit the rental charges, then the owner may raise a complaint, which the rent authority looks into. According to the new tenancy law, the owner does not possess the right to evict you if you pay the rental charges at regular intervals. If you fail to pay the rent consecutively for two months, the rent authority may direct accordingly, and the landowner may repossess the premises.

If you overstay on the landowner’s premises without his consent, then the landowner has every right to charge you double the rent for the first two months of the overstay and four times the rent thereon. It sighs relief to the landowners who fear the dreadful tenants.

Rules for Deposit with the Landowner

The rules state that the tenant has to deposit the two months’ rent for residential property and the maximum of six months’ rent for Commercial property. This move seems to be the tenants’ savior in metropolises where the rental Deposit sometimes extends up to ten months.

A rental deposit is collected to cover any damages to the property by the tenant. This move has brought anxiety to the landowners from the metropolises as they believe the six months’ rent would not be enough in case of any contingencies. But, this step aids the tenants in having affordable living in the metropolises.

Having framed the best rules to legitimize the rental sector, land and urban development remain the state subjects. So, the implementation may not be universal across the nation. It is at the states’ discretion to execute or not. Nevertheless, there seems no point for the states to deny the act as the Model Tenancy Law binds the owners and the tenants with the trust addressing each of their concerns and disbelieves.

A rental property creates a steady passive income, and capital appreciation over time attracts investors. It is never late to have one. Assetmonk is a platform that lists the curated properties for you to invest in. It provides varied options ranging from Growth, Growth Plus, and Yield models with an expected IRR of 21% per annum. Visit our website to get started with real estate investments. You can enjoy the stuff with high rental yields. Rejoice in the hassle-free property purchase process through fractional ownership, earning a steady regular income. Your properties might be waiting for you at Assetmonk.

Related Articles