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Model Tenancy Act, 2021

Renting housing is becoming more institutionalized, and the Model Tenancy Act embodies the government's attempts to integrate it gradually into the legal market. In a statement, the government claimed that it aims to provide a boost to private participation in rental housing as a business model in order to address the huge housing shortage that currently exists.

All new leases must be accompanied by written agreements, which must be submitted to the local district's 'Rent Authority,' in order to limit the likelihood of minor conflicts. Thus, the rent and length of the rental will be decided by mutual agreement between the owner and tenant, as expressed in a written rental agreement.

As part of the agreement, landlords must provide tenants with three months' notice before increasing rents in order to ensure that they may collect the market price for their homes while also providing tenants with the time to make adequate preparations in their best interests.

Security deposits for residential properties are also limited by the Act, ensuring that renters are not required to pay large amounts of money at the start of their lease, as is customary in many urban areas such as Mumbai and Bengaluru. According to the Act, only two months' rent may be accepted as a down payment for residential property; nevertheless, the current industry norm in large cities varies from five to as much as twelve months.

A tenant who does not vacate the premises leased in accordance with the lease agreement will be liable to pay the landlord twice the monthly rent for the first two months, and then four times for each month after that until the landlord no longer occupies the premises, as stipulated by the Act. Specifically, the law stated that "if the landlord fails to make any return, he shall be responsible to pay simple interest to the tenant on the amount which he has missed or failed to refund at such rate as may be set from time to time," according to the legislation.

If there is a problem between the landlord and the tenant, they must first seek the assistance of the 'Rent Authority.' It is possible for a party to challenge the Rent Authority's judgement by appealing to the 'Rent Court,' which is followed by an appeal to the Rent Tribunal, which is the ultimate appellate court in the process. No landlord or property management company is permitted to withhold any required supply to a tenant's occupied premises on the basis of a dispute or any other pretext, according to the Act. Utility companies are required to provide homeowners a 24-hour notice before doing any repair work that may cause a disruption in utility service.

In accordance with the law, tenants will not be evicted throughout the duration of their leasing agreement unless both parties agree in writing to do so. According to the Model Tenancy Act, unless otherwise agreed in the tenancy agreement, the landlord is responsible for activities such as structural repairs (except those caused by the tenant), whitewashing of walls and painting of doors and windows, changing and plumbing pipes when necessary, internal and external electrical wiring and related maintenance when necessary, as well as internal and external electrical wiring and related maintenance.

Drain cleaning, switch and socket repairs, kitchen fixture repairs, replacement of glass panels in windows and doors, and garden and open space maintenance, among other things, will be the responsibility of the tenant.

In the event that a landlord intends to make any improvements to, or construct any new structure on, a property that has previously been rented out to a tenant, and that tenant refuses to allow the landlord to make such improvements or construct such additional structure, the Rent Act provides that the landlord is liable.

According to the agreement, the tenant would not make any structural alterations or construct any permanent buildings in the premises leased without the written permission of the landlord.

The Impact Of The Model Tenancy Legislation On The Real Estate Market
Upon passage and implementation of this Act, it is envisaged that the stagnation in the real estate business would be addressed, resulting in aid and clarity for both landlords and tenants in the process.

For example, there was no clear redress if occupants squatted in leased premises long after the tenancy period had elapsed, resulting in owners opting to keep their properties vacant rather than leasing them out to renters.

With the establishment of rent courts and tribunals that will only deal with landlord-tenant conflicts, the Act has provided a clear solution to this problem, marking a major step forward for the housing market in general. People of all income levels will be able to access preferred rental housing choices under the Act, which also aims to address the problem of homelessness.

Written By: Samridhi Sharma, LLB - Chandigarh University
Email: [email protected]

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