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.

Share on facebook
Share on twitter
Share on linkedin
shutterstock 346370312

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

istockphoto 1439112216 612x612 1

EPF Form 31 – Partial Withdrawal

EPF Form 31 is used by employees to register claims for a fractional withdrawal of money from the EPF. Employees’ Provident Fund is a savings scheme backed by the govt. that can help employed persons establish a substantial corpus to satisfy their financial obligations after retiring. Employees are expected to deposit a percentage of their basic salary (12 percent) per month to this type of PF. The employer then makes a matching contribution to this investment. The corpus for workers is generated by pooling these deposits with relevant government interest. Employees might also opt to pull from their EPF savings throughout their job tenure to pay any unexpected bills that may occur. Also, read EPF Form 11. When can you withdraw your EPF funds?  An individual can withdraw his EPF money in part or in full via EPF withdrawal Form 31 only under particular conditions. Employees are eligible for withdrawal of their whole EPF savings amount in the events listed…

Read more
istockphoto 1200759231 612x612 1

EPF Passbook Download

Employees can download EPF Passbook online. Employee provident Fund Organisation offers an EPF passbook service online. It functions similarly to a passbook of a bank in that it records an individual’s EPF account spending. It allows one to easily see, import, and print their account statement. This online EPFO member passbook may also be accessed via the program. But, prior to installing the EPFO passbook, the UAN passbook must be unlocked. So, the EPF passbook is a database that contains a record of all contributions made to EPS and EPF accounts by the worker and the employer. The passbook details all contributions made each month. Interests earned in the account of the beneficiary are still kept in the passbook. Read EPF – Employees’ Provident Fund, EPFO Benefits & Process. Information in the EPF Passbook The company’s or employer’s name The ID of the establishment  The type and name of the EPFO office Contributions from both the employer and the employee…

Read more
istockphoto 1353920585 612x612 1

PF Form 19

The Employees’ Provident Funds and Miscellaneous Provisions Act of 1952 requires a worker to pay a set compensation payment to the PF account, and an employer must contribute an equivalent amount. Withdrawals under this program need to complete several forms, one of which is PF Form 19. Read EPF Withdrawal: How to Fill PF Form & Get Claim Online. PF Form 19 Is? Whenever a subscriber wishes to finalize his PF account, PF Form 19 must be completed. This only applies to workers without a UAN or Universal Account Number. So, it is possible to fill even if one does not possess a Universal Account Number, and an employee will only have to provide his PF account number. PF Form 19  will be utilized to request a settlement that is final of the PF account or to withdraw pension payments. A variety of PF Forms are accessible, each having a particular function. To achieve the intended result, these forms must…

Read more
National Pension Scheme tier 1 account

National Pension Scheme Tier 1

The National Pension Scheme Tier-1 Account represents the most fundamental type of pension fund account provided by GOI.  The govt plan aims to meet the retirement demands of private and public sector workers. To provide a framework for the use of NPS, the govt has divided it into two separate tiers: Tier 1 & Tier 2. The National Pension Program (NPS) is a national pension scheme that attempts to meet employees’ retirement needs in private and public industries. Read NPS Vs PPF: Comparison, Return Rates & Which is Better. Tier 1 NPS Account Aspects The following are a few major features of the Tier 1 NPS Account that distinguish it from the NPS Tier 2 account. Tier 1 NPS Account constitutes the most fundamental type of pension account. Early withdrawals from the Tier 1 NPS Account are permitted, but only like reimbursable advances and only after the investor has served for fifteen years. These withdrawals are permitted only in an…

Read more
password reset

UAN Password reset

As all Employee Provident Fund activities are being done online, the UAN, or Universal Account Number, is now the only ticket to operating the online EPF platform. With the advent of UAN, activities such as PF withdrawal, monitoring PF balance, applying for loans against PF, and so on have become much easier and more accessible to individuals. Furthermore, the UAN stays constant and transferable across an employee’s career. Employees must have membership IDs, that are eventually connected to the employee’s UAN, even if they change employers. Given the gravity of the situation, you must not lose your UAN and passwords. But, if you continue to lose or forget your UAN Password, follow the instructions below to generate it. Read EPF – Employees’ Provident Fund, EPFO Benefits & Process. But what if you forget your UAN Password? To restore or modify your UAN password, abide by the rules below: Open the EPF online portal. On the webpage, on the right-hand side,…

Read more
Customer care support

NPS Customer Care

The National Securities Depository Limited Central Record Keeping Agency or NSDL CRA (NPS Customer Care) may be reached @ (022) 2499 3499. One can also lodge any complaint electronically with the NSDL CRA’s Central Grievance Management System (CGMS) or with Karvy CRA. In the NPS, NSDL and Karvy are Central Recordkeeping Agencies (CRAs). NSDL’s location is 1st Floor, Times Tower, kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013 and Fax Number: (022) 2495 2594/ 2499 4974. The details for NPS grievance escalation are shown below. If one is dissatisfied with the settlement offered by NSDL/Karvy, one may submit a complaint directly to the watchdog, the Pension Funds Development and Regulatory Authority (PFRDA). Do not miss NPS Vs PPF: Comparison, Return Rates & Which is Better. NPS Grievances Escalation Level Level I Escalation  Official’s Name Mr. Chandrashekhar Warange Details For Contact  Tel Number: 022 24993499 Email: Position Grievance Redressal Officer (GRO) Level II Escalation Official’s Name…

Read more