Monday, July 26, 2021

Union Cabinet approves draft of Model Tenancy Act

The Union Cabinet has approved the draft of Model Tenancy Act (MTA) for adoption and enactment by States and Union Territories to promote rental housing in the country. MTA envisages to balance the interests and rights of both, the owner and tenant, in an accountable and transparent manner.

Explaining the need for MTA, Ministry of Housing and Urban Affairs has said that rental housing is a preferred option for different segments of society such as poor migrants, labour, young workers, working professionals and students. However, the existing rent control laws are restricting the growth of rental housing. It added that due to the fear of not getting the houses back, the owners feel discouraged to rent out their vacant houses.

The Model Tenancy Act (MTA) seeks to cover urban as well as rural areas. MTA will be applicable prospectively and will not affect existing tenancies. After enforcement of this Act, no person shall let or take on rent any premises except by an agreement in writing. The rent and duration of tenancy is to be fixed by mutual consent between the owner and tenant. This agreement is to be submitted to Rent Authority.

A digital platform will be set up in the local vernacular language or the language of the State and Union Territory for this purpose. The MTA also provides for a time-bound and robust grievance redressal mechanism. The Centre has said that the Model Tenancy Act will make vacant houses available on rent as well as repose confidence of investors in the sector.

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