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Things To Know About The Model Tenancy Act

Posted by Maansa Parameswaran on July 19, 2021
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The Model Tenancy Act

Very often there are disputes between landlord and tenants and it can become very stressful if it continues for a prolonged period and tough action is taken by the landlord against the tenant. In order to smoothen out the renting process and make it beneficial for both tenant and landlord, the Model Tenancy Act came into effect in the year 2020.

Need For The Act In Current Pandemic Situation

During COVID 19, the lack of proper laws for tenants made life very difficult for migrant workers and students, due to which they were in constant loggerheads with landlords. This Act aims to stop such problems by putting in place rules, guidelines to be followed by both landlord and tenant so that they can gain the best from their rental contract.

Features of the Model Tenancy Act

  • Residential and commercial properties can be put for sale only when there is a proper written agreement between both parties who agree tighter on the laid down terms and conditions
  • Landlord can get only two months of rent as security deposit from the tenant in case of residential properties
  • Landlord can get maximum six months of rent as security deposit from the tenant in case of commercial properties or a lesser amount put into the agreement
  • If the tenant has been asked to vacate the premises and does not do so, landlord can get double rent for the next two months of stay and four times the rental amount thereafter
  • Property that has been taken for rent cannot be sublet by tenant to anyone else
  • Tenant cannot make any structural changes to the property unless it is approved by the landlord
  • In the event of a huge problem causing huge distress in the area where the property is rented out, landlord can allow the tenant to stay for another one month, beyond the date for vacating in the rental agreement
  • Within two months of signing the rental agreement it is vital to inform about it to the designate rent authority in the State
  • The rent authority can be a deputy collector or higher official and so has the power to settle disputes arising between landlord and tenant on rental terms

The Model Tenancy Act is very comprehensive in the way it protects landlords and tenants alike. For example, it is not uncommon to hear tenants say that landlords come to the home as and when they please at any time, thus causing great discomfort. With implementation of this Act, such behavior is no longer possible. It is mandatory as per this Act for the landlord to give 24 hours notice before arriving at the property. The time in which the property must be visited is between 7 AM and 8 PM.

Security Deposit Burden Reduced

It’s rule that landlords should take only two month rent as security deposit has put to an end their demand for a year’s rent as was seen with many landlords in major cities like Delhi, Mumbai, Bangalore, Chennai etc. Yet another problem that many tenants felt unhappy about was the sudden hike in rental amount.

The landlord would suddenly in the middle of their tenancy demand an increased rental amount, else demand that the tenant leave the property. As per the Model Tenancy Act such action is inappropriate and unlawful. Landlords can only ask for an increase in the rental amount if such a point is mentioned in the agreement and when doing so three months prior notice has to be given.

Payment For Structural Changes

Many tenants have complained about unreasonable landlords demanding that they undertake structural changes to property as per their specifications but make payment for it as they are living in it. The Model Tenancy Act demands that only the landlord pays for such changes and is the only personal responsible for it.

No Rent From Tenant

One of the problems that landlords face is non-payment of rent from tenants which this Act resolves through its rental court. The landlord can approach this court to resolve this problem and evict the tenant right away.

Responsible Maintenance Payment

Maintenance is yet another important issue that has caused many disputes. The Act settles this by stating that the rental agreement should clearly lay down the home maintenance expenses that should be paid by the tenant and those to be borne by the landlord. In case of expenses to be paid by the landlord, he or she can do so by direct payment for it else by deducting it from the monthly rental income.

Expenses to be borne by the tenant should be paid for directly by him or her and cannot be claimed from the landlord. Such expenses can also be deducted from the tenant’s security deposit but if it is higher than this amount, the remaining should be borne by the tenant.

Changing The Indian Rental Market Environment

Decades have gone by with India’s rental housing sector operating with a lot of issues and disputes. Implementation of the Model Tenancy Act 2020 seeks to eliminate this for the first time and its success will help provide proper housing for all. Here is a look at the key aims of this Act:

  • Setup a vibrant and sustainable rental housing sector in India
  • Enable rental homes to be available for various income groups, thus eliminating homelessness
  • Give a standard format to the rental housing sector so that it moves into a formal setup
  • Unlock a large number of houses that have been lying vacant for so long in the rental market
  • Establish a model to be followed in the rental housing sector so that housing shortage can be stopped

Dispute settlement is yet another area of ambiguity with such issues going on for a lengthy period of time, without resolution in many rental homes. The Model Tenancy Act addresses this by stating that such disputes should be settled by the rent court so that they are solved quickly.

It furthermore states that if the tenant or landlord is unhappy with the judgment they can appeal against it at the rent tribunal or court in just 30 days of its order. It is not possible to take these matters to the civil court, which has no power against the judgment of the rent court. Any dispute should be settled by the rent court within 60 days itself.

Hope this helped you to get a clear picture on what and how the Act works. Also, don’t miss out our blog on things to know about RERA.

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