Model Tenancy Act – What is in favor of Owner

Many homeowners prefer to keep their homes vacant rather than lease them out because they are concerned that the tenants will unlawfully occupy their land.

According to a survey by Khaitan & Co and Knight Frank, the cities with the most significant number of empty houses as a percentage of total residential properties in Maharashtra are (21.7%) in Pune and Greater Mumbai (15.3%)

The Model Tenancy Act, 2021

The Model Tenancy Act, 2021 was authorized by the Union Cabinet in June 2021 for distribution to all states and UTs.

The Model Tenancy Act, 2021, intends to develop an effective regulatory environment in India to control landlord-tenant relationships. Because of no uniform rental housing law in the country, the relationship between landlords and tenants was polluted in the past owing to trust concerns.

Even though many states had previously adopted the Rent Control Act, there was a need for a dispute resolution system because Indian tenancy rules are widely seen as “pro-tenant.”

The lack of a regulatory framework to define both parties’ rights and obligations have traditionally resulted in protracted court fights.

What is in favor of the owner in the Model Tenancy Act

Tenancy period:

The tenant will be liable for increased rent if

1. The tenancy period has finished and not been renewed, or
2. The tenant fails to depart the premises after such tenancy

In case the tenant(s) does not vacate the premises at the end of the tenancy or upon an order terminating the residency, he will be obliged to pay in the following order:

1. Two times the monthly rent- for the first two months
2. Four times the monthly rent – until he occupies the premises(until renewal).

Eviction:

To evict a tenant, the landlord must file a petition with the Rent Authority. The authority has the authority to issue an eviction order for a variety of reasons

1. Refusal to pay the agreed rent
2. Failure to pay the rent for two or more than two months

• Parting of possession of part or entire premises without the written consent of landlord;

1. Misuse of premises despite receiving written notices to cease such misuse
2. Structural change by the tenant without the written consent of the landlord.

Establishment of a three-tiered redresses system:

Rent Authorities, Rent Courts, and Rent Tribunals would all be established under the Act. These regulatory institutions will relieve the civil courts of the burden of tenancy disputes and quickly resolve conflicts.

Security Deposit:

The Act limits the security deposit, which must be paid in advance by a tenant,

1. for not more than two months’ rent for residential premises
2. Not more than six months’ rent for non-residential premises.

Digitalization of rental structure:

A central database will be built for digital infrastructure and holistic means to obtain or store tenancy-related information.

This database can also be expanded to contain details about tenants’ previous tenancy histories, which can serve as a valuable quality indicator for future usage by interested parties. Digitilllaisation will help the landlord understand the history of the tenant and stay safer.

Conclusion

Great news after all this is, after several years their is a standardization of the tenancy act and its byelaws, which will eventually evolve and make it a fair act beneficial for both parties