Can this act bridge the trust deficit between tenants and landlords?

Policy Making Jul 08, 2021

The Model Tenancy Act was recently approved by the Union Cabinet. It has to be circulated and adapted in all States and Union Territories by enacting new legislation and amending the existing rental laws suitably. The first draft of this act was released by the government in 2019. According to the government, this act will facilitate the unlocking of vacant houses for rental housing purposes. It is also expected to give a blow to private participation in rental housing as a business model for labelling the huge housing shortage. It aims to bridge the trust deficit between tenants and landlords . Likewise, it will also help overhaul the legal framework concerning rental housing across the country. This act is an important piece of legislation that assures to ease the burden on civil courts, unlock rental properties stuck in legal disputes, and prevent future confusions by balancing the interests of tenants and landlords.

The need for this law arises as many people who migrate to metropolitan cities for education or job purposes often complain about difficult tenancy conditions and obscene sums of money as security deposits that they are asked to pay to lease accommodation. Some house owners routinely breach tenants’ right to privacy by visiting the premises unannounced for cleaning or repair works. Many tenants also complain about the sudden increase in rent without any proper reason.

The model highlights that it will be prospectively applicable and will not affect the existing tenancies. All new tenancies must submit a written agreement to the district Rent Authority. All the landlords and tenants must abide by the laws mentioned in the model and their roles and responsibilities. A landowner must respect the tenants’ privacy by issuing a notice 24 hours before entry. Landlords cannot deny any essential supply to the premises occupied by the tenant. The tenancy shall be renewed on a month-to-month basis on the same terms and conditions as in the expired tenancy agreement, for a maximum period of six months. If extended above six months, the tenant shall be liable to pay compensation of double the monthly rent for the coming months.

The housing sector faces several issues. As per the data from the Ministry of Housing and Urban Poverty Alleviation, there is a shortage of 18.78 million housing units. Housing Plethora is in the higher income societies, while 95% of the shortage is in the Economically Weaker Section and  Lower Income Groups. For the development of an affordable housing market, challenges like increased cost of construction, lack of private sector participation, inaccessibility to home loans by the poor and shortage of developed and interference-free land need to be addressed.

However, this act does pose some given challenges. It will be crucial to implement this act in the states as the urban development remains the state matters. Hence, the states may choose not to follow guidelines, diluting the core implementation of the Model Tenancy Act. There might also be interference of multiple laws, due to the already existing Rent Control Act, 1948. There is also a lack of clarity about penalizing the tenant in case of vacating the house in an emergency. The act envisions a three-tier grievance redressal system with a district-level judge in charge of dispute resolution, which may require the state to invest resources to set up these institutions.

This article has been written by Sharon John for The Paradigm

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