Govt approves Model Tenancy Act; to enable setting up of district-wise rent courts, tribunals in 2020

 Model Tenancy Act

In a bid to institutionalise the rental housing phase, the authorities of India has authorised the Model Tenancy Act, 2021 with a provision to arrange district-wise rental courts, authorities and tribunals throughout the nation.

With this, civil courts have been barred from entertaining any swimsuit or continuing associated to the provisions of this Act. By formalising all of the constructions and authorities, the federal government is aiming to offer confidence to landlords to let loose their vacant premises and stability the rights of each tenants and landlords.

The Model Tenancy Act will now be circulated to all states and Union Territories for adaptation by means of enacting contemporary laws or amending current rental legal guidelines suitably.

“The Model Tenancy Act will facilitate unlocking of vacant houses for rental housing purposes. It is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage. The Act will enable institutionalisation of rental housing by gradually shifting it towards the formal market,” mentioned Niranjan Hiranandani, National President, NAREDCO.

The District Collector or District Magistrate, with the earlier approval of the State Government or Union territory is anticipated to nominate an officer, not beneath the rank of Deputy Collector, to be the Rent Authority inside his jurisdiction.

The Rent Authority, inside three months from the date of its appointment, will put in place a digital platform within the native vernacular language for submissions of tenancy agreements between landlords and tenants.

On Wednesday, the Union Cabinet chaired by Prime Minister Narendra Modi authorised the Act that covers each rural and concrete areas of the nation.

“While tenancy in commercial real estate segment has been a well-established tenet of the market model, the fractured landlord tenant relationship in case of housing segment has discouraged development of market model and obstructed institutionalisation of a rental housing market,” mentioned Shishir Baijal, CMD, Knight Frank India.

This Act won’t apply to properties owned or promoted by the federal government authorities, undertakings or enterprises or a statutory physique or Cantonment board. Premises owned by an organization, college or organisation given on lease to its workers as a part of service contract, properties owned by spiritual or charitable establishments may even not fall below the jurisdiction of this Act.

Following the enforcement of this Act, no particular person can be allowed to enter right into a tenancy association with out a written settlement.

The Act goals to offer a time-bound and strong grievance redressal mechanism consisting of Rent Authority, Rent Court and Rent Tribunal for fast-track decision of disputes. The Rent Court and Tribunal is anticipated to get rid of complaints or appeals inside 60 days. The tenant is anticipated to proceed paying lease even throughout the pendency of a dispute.

In case of Force Majeure occasion, the owner is anticipated to permit the tenant to proceed in possession of the property until 1 month from the date of cessation of such an occasion on the phrases of current tenancy settlement.

“The Model Tenancy Act will help bridge the trust deficit between tenants and landlords by clearly delineating their obligations and will eventually help unlock vacant houses across the country. To ensure speedy redressal of disputes, the Act also proposes to establish separate Rent Court and Rent Tribunal in every state/UTs to hear appeals for matters connected to rental housing,” mentioned Anuj Puri, Chairman, Anarock Property Consultants.

The Act stipulates safety deposit equal to a most of two-month lease for residential premises and most of six-month lease in case of non-residential property.

The authorities’s transfer to formalise the rental phase is anticipated to assist in overhauling the authorized framework and is probably going to offer a fillip to non-public participation in rental housing for addressing the housing scarcity in several revenue teams.


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