Why in News?
Last week, the draft Model Tenancy Act of 2019 was released. It aims to regulate rental housing by a market-oriented approach.
What is the need?
- As per the Census 2011, a count of 1.1 crore houses are lying vacant.
- The Model Act would bring these houses into the rental market and would promote the growth of the sector.
- The existing rent control laws discourage owners from renting out their vacant houses due to fear of repossession.
- When Housing for All by 2022 Mission was rolled out in 2015, it promoted only ownership housing — with no mention of rental stock.
How can the vacant houses be brought underrenting?
- By bringing transparency and accountability in the existing system of renting of premises.
- Bybalancing the interests of both the property owner and tenant in a judicious manner.
What are the provisions of the draft act?
- It stipulates a robust grievance redressal mechanism comprising of Rent Authority, Rent Court and Rent Tribunal.
- It proposes to cap the security deposit equal to a,
- Maximum of two month’s rent in case of residential properties and,
- Minimum of one month’s rent in case of non-residential property.
- No person shall let or take on rent any premises except by an agreement in writing.
- Applicability – Forwhole of the State i.e. urban and rural areas.
- Within 2 months of executing rental agreement, both landowner and tenants are required to intimate to the Rent Authority about the agreement.
- Within 7 days after the intimation, a unique identification number will be issued by the Rent Authority to the both the parties.
- A digital platform will be set up in the local vernacular language of the State for submitting tenancy agreement and other documents.
- It states to promote the creation of a rental housing stock for various income segments (i.e. migrants,students, professionals, formal and informal sector workers) mainly through private participation.
What are the Tenant and landlord rights?
- The Model Act sets acap onsecurity deposit to be paid by the tenant which protects them from heavy charges by the owner.
- It lists the kinds of repairs each party would be responsible for, with the proviso that money for repairs can be deducted from the security deposit or rent, if a party refuses to carry out their share of the work.
- Rent Court can allow repossession of the property by the landlord if the tenant misuses the premises, after being served a notice by the landowner.
- Misuse of the premises – Includespublic nuisance, damage, or its use for immoral or illegal purposes.
- If the tenant refuses to vacate, the landlord can claim double the monthly rent for two months, and four times the monthly rent thereafter.
What will happen to the existing Acts?
- The Model Act states that all state rent control Acts stand repealed.
- The land and urban development are state subjects, so the central Model Act is not binding on the states.
- The states and Union Territories will choose to repeal or amend their existing Acts.
- The Model Act would be applicable only to fresh tenancies and will not affect the existing tenancies.
Source: The Indian Express, PIB.
