Model Tenancy Act 2021 – Will it Fix Home Rental Market in India

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The Model Tenant Act, 2021 will become a reality in India very soon, primarily to establish standards and safeguard the rights of tenants and property owners from each other.

Property leasing is a thriving and diverse sector in India, with millions of people renting out properties (both residential and non-residential) each year.

Tenants believe that property owners are bloodsuckers who seek to withhold security money at any cost in order to dominate them. On the other hand, property owners believe that tenants are terrible because they do not care for their homes and cause a lot of damage, forcing them to hold a large security deposit with them.

Rules under the Act

Many times, even though a legal agreement is reached, things do not work out on the ground, and there is a lack of professional ties. This Model Tenancy Act 2021 is attempting to precisely fix this problem by establishing sufficient standards and rules that will benefit both sides.

Here are some of the most essential rules of the Model Tenancy Act, 2021 that you should be aware of.

  • If the renter does not quit the premises on time, there will be severe consequences.

After the agreement expires, there is a maximum 6-month extension period under the same terms and criteria as stated in the agreement. However, if the tenant does not leave the premises after this 6-month extension (or if the tenancy is terminated by notice or order), they will face severe consequences. They will have to pay double the rent for the first two months, then four times the rent for the next two months, and finally six times the rent for the final two months.

  • Each district has its own rent authority, courts, and tribunals.

In each district, a unique three-tier structure will be established to handle problems involving the rental market. A civil court will not have jurisdiction over these Model Tenancy Act cases. Under each district, a rent authority, a rent court, and finally a rent tribunal will be established at the first level. This ensures that a distinct resolution system is put up for these issues.

  • A written agreement is required.

When any property is rented out, a formal agreement is now required. In any case, most people were probably making a proper agreement, but now it’s a law in and of itself. This agreement must also be submitted to the relevant rent authority within two months after the date of the agreement. According to the existing wordings, a digital platform will be built up for this.

  • There will be no structural alterations or property subletting.

The renter is not permitted to make structural changes to the property, nor is he or she permitted to sublet a section of the property to someone else without the consent of the property owner. If subletting is permitted, a supplementary agreement must be drafted and filed with the rent authority.

  • The landlord cannot halt the premises’ basic supply.

It said that the property owner cannot cease the supply of any basic resource such as water, electricity, and so on just because there is a disagreement with the renter. In real life, if there is a disagreement or conflict, the homeowners will take these procedures to “teach a lesson” to the tenants. Its major purpose is to preserve the rights of tenants who have occupied the premises. If the homeowner continues to do so, the renters may file a complaint with the rent authority, which may issue an order restoring the services as well as imposing a penalty on the homeowner.

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