Real Estate

To streamline renting, Housing Ministry introduces draft Model Tenancy Act

Our Bureau New Delhi | Updated on July 11, 2019 Published on July 11, 2019

The Model Act provides for its applicability for the whole of the State that is urban and rural areas   -  istock/pjhpix

Envisages grievance redressal mechanism comprising rent authority, court and tribunal

Days after Finance Minister Nirmala Sitharaman proposed to come up with a model tenancy law in the Budget 2019, the Ministry of Housing and Urban Affairs has issued Draft Model Tenancy Act (MTA).

“The aim of the Act is to balance the interest and rights of both the owners and tenants and to create an accountable and transparent ecosystem for renting the premises”, said a statement issued by the Ministry.

Security deposit

MTA stipulates a grievance redressal mechanism comprising rent authority, rent court and rent tribunal, the statement added. It also proposes to cap the security deposit equal to a maximum of two months’ rent in case of residential properties and minimum of one-month rent in case of non-residential property.

Once the Act comes into the force, no person shall let or take on rent any premises except by an agreement in writing. The Model Act provides for its applicability for the whole of the State that is urban and rural areas.

Digital platform

A digital platform will be set up in the local language of the State for submitting tenancy agreement and other documents.

Within two months of executing rental agreement both the landowner and the tenant will be required to intimate to the rent authority about the agreement and within seven days a unique identification number will be issued by the rent authority to both parties, the draft stated.

The Ministry is now seeking comments from the public and the stakeholders by August 1, 2019

A copy of the draft Act has also been shared with the States/UTs for seeking their views/comments. Once finalised the Model Act will be shared with the States/Union Territory (UTs) for adoption, the official statement added.

Published on July 11, 2019

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