The Model Tenancy Act (MTA) is making headlines as it aims to resolve longstanding issues in India’s rental housing sector. According to the Ministry of Housing and Urban Affairs (MoHUA), only four states, namely Andhra Pradesh, Tamil Nadu, Uttar Pradesh, and Assam, have implemented the law so far. This piece will explore the purpose behind the Act, its main features, and its significance.
Need for the Model Tenancy Act
The existing rent control laws have been a roadblock to the growth of the rental housing sector, with homeowners reluctant to rent out their vacant properties due to fears of repossession. The MTA has been introduced to improve transparency and accountability in the renting process, aiming to balance the interests of both landlords and tenants. As per the 2011 Census, over 10 million properties were vacant in urban areas. The urban populace, already covering a third of India’s population, is growing due to migration, further elevating the need for a functional rental market.
Understanding the Model Tenancy Act
Enacted in 2021, the Model Tenancy Act seeks to put in place a Rent Authority to regulate the renting of premises and safeguard the interests of landlords and tenants. Its ultimate goal is to establish a vibrant, sustainable, and inclusive rental housing market across different income groups, contributing to reducing homelessness. By promoting a shift toward the formal market, it is aimed at institutionalizing rental housing.
Key Provisions of the Model Tenancy Act
Under the MTA, it is mandatory for a written agreement to be in place between the property owner and the tenant. It also mandates the establishment of an independent authority in every state and Union Territory to register tenancy agreements and a separate court for addressing tenancy-related disputes. For security purposes, a tenant’s advance deposit can be up to two months’ rent for residential purposes and up to six months’ rent for non-residential purposes.
Moreover, the Act clearly specifies the roles and responsibilities of landlords and tenants. Landlords are required to take care of structural repairs, whitewashing of walls, painting of doors and windows, etc., while tenants are responsible for tasks like drain cleaning, repairs of switches and sockets, kitchen fixture repairs, replacement of glass panels in doors and windows, and maintenance of gardens/open spaces.
The Act also outlines stipulations for landlord access to rented premises and mechanisms for vacating the property, protecting both parties’ interests and ensuring a clear understanding of their rights and obligations.
Significance and Challenges of Model Tenancy Act
The Act is significant as it promises to provide a swift mechanism for resolving disputes between landlords and tenants, thus overhauling the legal framework for rental housing in the country. By incentivizing private participation in rental housing, the Act is positioned to address the pressing issue of housing shortages.
However, there are challenges to its implementation. Since land and urban development are state subjects, the Act is not binding on the states. This indicates the need for cooperative federalism where the Centre and states work together to address the housing crisis in India.
