What Is Model Tenancy Act?

The recently approved Model Tenancy Act is important for both landlords as well as tenants in the sense that apart from catering to the rental housing needs, the system shall be overhauled and would clearly specify obligations of both landlord and tenants thereby bridging the trust deficit that exists between them. The draft of the MTA or Model Tenancy Act was first notified in 2019.

In the views of the Minister of Housing and Urban Affairs, Hardeep Singh Puri, the availability of 1.1 crore vacant houses for rental purpose will complement Prime Minister Modi's vision of 'Housing for All' by 2022'.

Features of the Model Tenancy Act

• The MTA will result in establishment of specific contract arrangements between the owner and tenant instead of the informal agreements.

• The Centre suggests that the MTA Act will seek to balance both the rights as well as interest of both the tenants and landlords in a transparent and accountable way.

• The Act will boost the growth of rental housing segment across the country as it is the most coveted housing options for various segments including students, migrant workers and professionals.

• The MTA Act will offer a template in respect of residential and commercial properties, as well as offer a model for rural and urban real-estate.

• For faster resolution of any kind of dispute between the landlord and tenant, rent court or a rent authority shall be made available.

• In case of a residential property, the tenant will be required to deposit a security of two months, while for a commercial property six month rent would need to be deposited.

• The tenant cannot further sub-let a part of or the entire property to someone else.

• In respect of the rent, the landlord cannot hike the rent in the middle of the tenure. Likewise before implementing the rental hike, he or she would have to give a written notice at least 3 months prior to revision of rent.

• In a case if the landlord duly fulfills all the conditions stated in the rent agreement with respect to notice period etc., and if the tenant fails to vacate the premise on the tenancy expiration period or tenancy termination, the landlord can straightaway double the monthly rental for two months and then can quadruple it after that.

• Also, if there happens to be a dispute between the two parties, which in the case is tenant and owner, the MTA Act says the landowner or landlord cannot cut power and water supply to tenants.

• For the repair and maintenance, the MTA Act has held the landowner liable as for also whitewashing of walls, doors and windows.

• Also, for the purpose of carrying out repair or replacement at the let-out property, the landowner needs to give a prior notice of 24 hours.

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