The union cabinet, on the 2nd of June, 2021 has approved the draft of the Model Tenancy Act, 2021. The formulation of this act aims to make housing available to all and increase India’s rental housing culture. This will also increase the contribution of rental income to the overall economy of the country.

As for the state, they can adopt it as a part of a new legislature. However, the issue of rent falls under the state list. The states have the power to make amends to it as per their convenience.There have been changes in the act that will help maintain consistency in the rental sector and reduce disputes.

The new act has created a compulsion to register the rent agreement on the website of the rent authority. These websites will also be in the vernacular language. As it has been a mandate and a tenant will also have to pay the rent even during the pendency of a suit in the courts. 

Along with this, states are asked to develop a grievance mechanism. This system is supposed to comprise a rent authority, rent court, and a rent tribunal. A 60-days mandate has been creating to dispose of any matter in hand.

The security deposit cannot exceeded for more than two months for the residential property. However, for commercial properties, it cannot be for more than six months. In addition to this 1-month minimum security deposit for the commercial property has been set. This amount would be returned to the tenant after the deduction of the liabilities.

The Rent Control Act, 1948 had forced the landlord to set up a monetary ceiling. His has been removed under the new act. This helps the landlord to increase the price depending upon the demand in the society.

The tenants are usually seen making changes in the structure of the premise, and at times, it was not with the landlord’s consent. To curtail this power of the tenant, the act has now made it compulsory to have the written consent of the landlords while making such changes. The same procedure has to be used in the case of subletting.

Maintenance was also one issue that needed deliberation. Therefore, to sort this, the MTA says that maintenance is the responsibility of both parties. The house’s condition has to be the same as it was before giving it up for tenancy. However, during the occupancy of the tenant, it remains his responsibility to maintain the house. If he denies doing so, the landlord has the right to deduct the amount from his security.

Similarly, if the landlord also denies any repair, the tenant has full right to deduct the amount from the rent. However, it should be less than 50% of the rent.

In a situation where the house becomes inhabitable, the tenant can complain to the landlord and vacate the house in 15 days. If an unforeseeable event occurs, the landlord cannot take rent until he makes it habitable again. However, there might be certain situations where this is not possible. Then the landlord is bound to return the deposit and advance rent within 15 days. However, there can be a reduction in the security of the tenant liabilities. The new act has also introduced the concept of property managers.

Aishwarya Says:

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