Owning a property is a relief and a means to secure the future but the same security creates problems when it is rented out. Many a times, the landlord develops problems with the tenant and it is vice-versa where the tenant also gets to bear a number of issues with the landlord. Differences and Disagreements is long time confusion between tenants and landlords. Hence some rules and regulations have to be laid down which can support both the parties. The Model Tenancy Act, introduced by the Ministry of Housing and Urban Development of India, aids to build up trust between the landlords and tenants.
1. Introduction to Model Tenancy Act
The Union Cabinet of India had laid down some rules and regulations for tenants and landowners. These were approved as The Model Tenancy Act on June 2, 2021 and circulated to all the states and the Union Territories of the country for adaptation. This Act is applicable to both the residential and commercial real estate asset classes.
The Model Tenancy Act will create a sustainable atmosphere for all sectors of the society that include migrants, formal and informal sector workers, professionals, students and urban poor. This Act came into existence after noticing the different types of conflicts between the tenants and the landlords. This so happened because there was no system of laws for them to maintain peace. So far only 4 States have aligned their local rental laws with those provided by the Model Tenancy Act.
2. Main Objectives of Tenancy Act
It aims to establish a Rent Authority that could regulate the renting of any premises, be it residential or commercial. It also intends to protect the interests of landlords and tenants. It wants to provide a speedy adjudication mechanism to solve the disputes between the tenants and the landlords.
3. Provisions Mentioned in the Model Tenancy Act
3.1. Mandatory Written Agreement
A written agreement is compulsory between the owner or the landlord and the tenant, which should specify the rent period of tenancy and other related terms.
3.2. Dispute Adjudication Mechanism
As per the Model Tenancy Act, a Dispute Adjudication Mechanism should be established consisting of a three tier quasi- judicial Mechanism. It should consist of Rent Authority, Rent Court and Rent Tribunal. No civil court will take up any dispute, related to provisions mentioned under the Model Tenancy Act.
3.3. Presence of Independent Authority and Rent Court
Every state and Union Territory should have an independent authority where the registration of Tenancy Agreements can take place. A separate court should also be there which can handle the tenancy related disputes. The District Collector should establish these with the approval of the state government. A Rent Tribunal should also be established by the state or union territory government, after consulting with the jurisdictional High Court.
3.4. Rights of Landlords and Tenants
The Model Tenancy Act clearly describes the rights of Landlords and Tenants. Activities like structural repairs, whitewashing of walls and painting of doors and windows should be taken up by the landlord but not those repairs which are necessitated by damage caused by the tenant.
A few tasks are given to the tenants too, like, drain cleaning, repairs of switches and sockets, kitchen fixtures, replacement of glass panels in windows, doors and maintenance of gardens and open spaces.
3.5. Limit to Security Deposit
Security deposit for residential purpose should be limited to a maximum of two months’ rent and not more than six months for non-residential purposes.
3.6. Prior Notice should be Given by the Landlord
A prior notice of 24 hours should be given to the tenant by the owner, to enter the rented premises, to carry out repairs or replacement.
3.7. Conditions for Eviction of Tenant
Few conditions are laid down by the Model Tenancy Act for the eviction of tenants. The landowner holds the authority to evict a tenant if he refuses to pay agreed rent, if he fails to pay rent for more than two months, if he occupies a part or whole of premises without written consent and if he misuses the premises despite a written notice.
3.8. Vacating the Premises
On termination of tenancy, if the tenant fails to vacate the premises, even though the owner has given the notice as decided and have fulfilled all those conditions which are mentioned in the agreement, then the landlord gets the rights to vacate the premises. He is also at liberty to double the monthly rent for a period of two months and then this rent gets increased to four times, if the tenant doesn’t vacate till then.
4. Dispute adjudication mechanism
This mechanism, as stated by the Model Tenancy Act, should possess a three tier quasi- judicial Mechanism, consisting of a Rent Authority, a Rent Court and a Rent Tribunal. The Model Tenancy Act states the timelines for adjudication of certain cases by all three authorities and also mentions the procedure for examination of cases and judicial conduct by Rent Courts and Rent Tribunals.
4.1. Rent Authority
The Rent Authority is headed by the Deputy Collector. He is expected to initiate a digital platform to enable submission of tenancy related documents as mentioned. He should give a unique identification number to the owner and the tenant mentioned in the tenancy agreement and then upload the details of the agreement within a week of receiving. The Deputy Collector has to resolve disputes with regard to revision of rent, and decide the revised rates. As an authority, he should pass interim orders to restore supply of essential services and award compensation.
4.2. Rent Court
Additional Collector or Additional District Magistrate is the authority of Rent Court. He can adjudicate appeals against the Rent Authority’s orders and can also Order for eviction and recovery of possession of the said premises.
4.3. Rent Tribunals
This body of Model Tenancy Act is headed by the District Judge or Additional District Judge and holds the authority to adjudicate appeals against the Rent Court’s orders.
5. Wrap Up The ModelTenancyAct
strives to create a balance between the interests of landowners and tenants, both in the residential and non-residential sectors. It emphasises to set-up separate rent authorities, courts and tribunals in every district so that there is speedy dispute resolution. This Act protects tenants from arbitrary hikes and also laid down rules and regulations for both the parties. This Act may end all the disputes, disagreements and confusions that are related to renting and leasing.