New Model Tenancy Act, 2021

By : Satyaki Paul

On June 2, 2021 the Union Cabinet chaired by PM Modi approved the new Model Tenancy Act (MTA), 2021. The Union Budget 2019-20 first proposed the necessity for bringing out a new Tenancy Act to safeguard the interests of both landlords as well as the tenants, so that an affordable rental housing market can be developed.

In due course, the draft model tenancy act, 2019 was introduced and circulated among the states and UTs for consultation and commenting. This new Act is in line with goal of “Housing for All” by 2022, a vision put forward by PM Modi. The Act aims to link the confidence deficit between tenants and landlords by visibly describing their responsibilities. As per its provisions, various states can adopt this act with fresh legislation as because housing is a state subject under the seventh schedule of our Indian constitution.

The key features of Model Tenancy Act, 2021 are:

1. The Centre has appealed that the MTA act will bring a sense of balanceto the interest and rights of both the landlord and the tenant. This will be donethroughlegal mandates which will ensure accountability and transparency.
2. The Act will boost the growth of rental housing as it is a favored option for diverse segments of individuals such as migrant workers, professionals, students, etc.
3. The Act will provide a model for urban and rural assets, as well as a model for residential and commercial assets.
4. According to Hardeep Singh Puri, the Housing and Urban Affairs ministerof India, the new act would take individuals from informal/casual contracts to specific legalized contract arrangements between landlord and tenant.
5. In case of disagreement between landlord and tenant, a rent authority, or a rent court would be available for speedy resolution.
6. The Act specifies that a tenant will have to submit a security deposit of two months for residential premises. And, in case of commercial asset, a tenant will have to pay six-month rent early in advance to the landlord.
7. The tenant cannot lease a part of or the whole property to someone else after conforming to an earlier agreement.
8. Furthermore, the Act says if a landlord has fulfilled all the conditions stated in the rent agreement i.e., giving notice period, etc., and the tenant fails to vacate the premises on the expiration of the period of tenancy or termination of tenancy, the landlord is authorized to increase the rent two-fold for next two months and four-fold times after that.
9. In this Act, the landowner would give a notice in writing 3-months before revising rent. The landlord cannot hike the rent in the mid of the tenure.
10. In this Act, a landowner cannot cut power supply and water supply in case of a disagreement with the tenant.
11. The Act observes that a landowner cannot enter the rented premises without 24-hour preceding notice to carry out repairs or replacement.
12. The Act observes that the landlord will be accountablefor repairing structural damages and take on measures such as whitewashing walls, and painting doors and windows.

The features if correctly used can enhance the development of our “sunrise sector” i.e., real estate developments. In short, the new Act seeks tooverhaul this sector with the aim of alleviating India’s housing shortage through the ease of provision of affordable, quality rental housing and further charm long-term institutional capital. Therefore, such legal frameworksare decisive factors in ironing out the challenges affronted both by landlords and tenants. In conclusion, I can observe that judicious implementation of the law has the latent possibility to set the housing market well on its way to a better and healthy tomorrow. The author works as a Ph.D. Research Scholar at the Department of Anthropology, University of Calcutta, and the co-author of the book Anthropology For All (2021).