The Model Tenancy Law will redefine the landlord-tenant relationship and promote fairness in the rental housing market. Let’s deep dive into the Model Tenancy Act.
After the outspread of COVID, many tenants were unable to pay their rents on time due to salary cuts and job losses. With the implementation of the Model Tenancy Act, the rental housing market will witness a drastic change.
The new Tenancy Act redefines the relationship between the tenant and landlord and also describes the rights and duties of both in a detailed manner.
Here’s what every landlord and tenant must know about the Model Tenancy Act:
What is the Model Tenancy Act?
The draft Model Tenancy Act aims to make renting more lucrative for both the tenant and the landlord. The government has proposed guidelines that enforce the rental contract and protects the rights of tenants and landlords.
To ensure speedy redressal of disputes between both parties, it proposes to establish a Rent Court and a Rent Tribunal to hear appeals pertaining to matters of rental housing.
The act will not be binding on states that are free to modify the law depending on their residents.
Key Features of Model Tenancy Act
As per the draft Model Tenancy Act, 2020 the government has laid down various proposals to safeguard the rights of landlord and tenant. Here are some of the key features of this Act:
Rent Authority
The Model Tenancy Act makes it mandatory to rent premises only through a written agreement. Both the landlord and tenant within two months of executing the rental agreement will be required to inform the authority regarding the rent agreement.
The rent authority will then issue a Unique Identification Number to both the parties and upload the agreement on its website. This will ensure greater transparency between the tenant and the landlord.
Security deposit and compensation
The Act limits the security deposit to a maximum of two month’s rent in the case of a residential property. If the property is non-residential, a security deposit of a minimum of one month is mandatory.
If the tenant refuses to vacate the premises after the tenancy is terminated by the landlord as per the rent agreement or way of an order, the tenant shall be liable to pay double the monthly rent for the first two months and four times the monthly rent after that.
Rent Increment as per The Model Tenancy Act
The rent can be increased only after the issuance of a notice from the landlord to the tenant. Before the rent increment, the landlord must first issue a notice of three months and cannot increase the rent during the continuation of a tenure.
After receiving the notice from the landlord, the tenant has to reply in acceptance or non-acceptance of the notice. In case there is no reply from the tenant, it is deemed that the tenant has accepted the hike in rent as proposed by the landlord.
Permission to sublet the premises
Tenants will not be permitted to sublet either whole or a part of the premises without the prior written consent of the landowner. After the approval from the landlord, the tenant is liable to provide all the details of the sub-tenancy.
Right of successor
The terms of the agreement executed between a landlord and tenant will be binding upon their successors in the event of the death of the landowner or tenant. In such a case, their successors will have the same rights and obligations, as agreed in the tenancy agreement, for the remaining period of the tenancy.
Restriction of landlord intrusion
Landlords intruding into the premises at any time is a common issue faced by tenants. The policy states that the landowner can enter the property in accordance with a written notice which has to be served to the tenant 24 hours prior to entering the property for any repairs or inspection.
Maintenance of the premises
The responsibility for maintaining the premises lies with both parties. The rent agreement will have to specifically mention who will be held responsible for what in case of damages. Tenants cannot sublet the whole of the rented building or a part of it without prior permission from the landlord.
After the COVID outspread majority of the workforce had to move to their hometown due to a lack of jobs during the lockdown. If the Model Tenancy Act is executed in the right manner it will bring greater transparency between the landlord and tenant and thereby improve the rental housing market.
