Within a few days after finance minister Nirmala Sitharaman urged to do away with “archaic” rental laws in her maiden budget speech on July 5, the Ministry of Housing and Urban Affairs is already out with the draft of Model Tenancy Act, 2019. Touting it as the biggest reform in the sector post RERA, the draft is as of now open for public comments.
The aim of the law is to fairly define the relationship between the lessor and lessee. The law is expected to give a push to rental housing as the owners will be encouraged to let out their property for renting. Also, unsold inventory of ready homes are also expected to enter rental housing post the law.
Here are some of the key points of the draft of Model Tenancy Law:
· The landlord shall intimate the tenant three months prior about any revision in the rent.
· In case the premises has been let for a fixed term that is mutually agreed, rent may not be increased during the currency of the tenancy period.
· It will be unlawful to charge a security deposit in excess of three times the monthly rent.
· The security deposit has to be refunded back to tenant within one month after vacation of the premises after making deductions if any.
· Every tenant who makes payment of rent or nay other advance payment shall be entitled to obtain a written receipt signed by landlord or his property manager.
· In case the landlord refuses to get the agreed/scheduled repairs done, tenant can get the work done and deduct the expenditure from the rent. However, the deduction from the rent should not exceed fifty percent of the agreed monthly rent.
· The responsibility to maintain the premises lies with both the parties.
· Landlord or his property manager may not enter the let-out property without a 24-hours prior notice for whatever reason.
· Landowner cannot cut power and water supply in case of a dispute with the tenant.
· Tenant will be heavily penalized for over staying in the premises beyond the agreement. Landowner will be entitled to a compensation of double the monthly rent for two months of overstaying.
Click here to find the original draft circulated by Ministry Of Housing And Urban Affairs
Model Tenancy Law may seem adequate and effective but experts have already started questioning its implementation. The sheer fact that states and UTs can frame new laws or amend the model tenancy law to any extent seems to dilute its authority and purpose completely.