New Delhi: After dilly-dallying for over four years, the Narendra Modi government Wednesday came out with a draft model tenancy law.
The draft law proposes to set up an independent authority in every state for the registration of all tenancy agreements, and a separate court for resolving tenancy-related disputes. It also has a provision to cap rent rates, and thus check any arbitrary hikes.
However, the proposed legislation is a ‘model act’ because land is a state subject. “States will have the option of adapting or rejecting it,” a senior housing ministry official told ThePrint on the condition of anonymity.
The move could provide relief for both tenants and landlords and help take some load off India’s overburdened litigation process.
What the draft law envisions
The rent authority will be headed by a deputy collector-rank officer, and will be set up by district collectors with the approval of the respective state governments. The authority will set up a website where the details of all agreements will be put up.
It will be mandatory for both the landlord and the tenant to inform the rent authority after getting into an agreement. This will ensure that a landlord does not arbitrarily increase the rent in variance with what has been agreed to in the agreement. It will also ensure that the tenant is not evicted at the whim of the landlord, the ministry official explained.
The proposed act will also safeguard the interests of the landlord by ensuring that a tenant does not ‘squat’ on the property against the terms of the agreement. Landlords will also be able to charge rents — to be decided by the respective state governments — on par with market rates.
All disputes will be heard at rent courts that states will have to set up. Civil courts will no longer hear such cases, as it happens now. At present, thousands of rent-related disputes are pending in courts across India.
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A long-awaited law
The Ministry of Housing and Urban Poverty Alleviation had drafted a similar Model Tenancy Bill in 2015, but it never saw the light of the day. PM Modi had spoken elaborately about bringing in a model tenancy act.
But now, ministry officials say the draft law could unlock a large number of rental stock. “Property owners won’t be apprehensive about renting out their premises,” said the official quoted above.
Many states have their own laws on rent, but the laws have become archaic over a period of time and failed to serve their purpose.
Penalty for overstaying
The draft law piloted by the Union housing and urban affairs ministry has also proposed hefty penalty for tenants who fail to vacate the rented property after their tenancy has been terminated by order, notice or as per agreement. A landowner will be entitled to get compensation of double of the monthly rent for two months and four times of the monthly rent after that, for the use and occupation of the premises by a tenant who does not vacate it.
However, if landowners decide to exercise their right to recover a property from an overstaying tenant, they will have to return any rent received in advance after deducting the charges due.
The ministry on Wednesday put the draft law on its website (www.mohua.gov.in) inviting suggestion and comments from all stakeholders.
Security deposit
The model law has also fixed the security deposit to be paid by the tenant in advance, which will be a maximum of two months’ rent in case of residential property, and a minimum of one month’s rent in case of a non-residential property. The security deposit shall be refunded to the tenant at the time of taking over vacant possession of the premises, after making due deduction of any liability of the tenant.
Also, no tenant will be allowed to directly or indirectly sublet or assign, whole or part of the premises for a rent that is higher than the rent charged by the landowner to the tenant.
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Hi respected, this is Akash. We have been living in a rented house in manglore now since over to 50 years, am 30 years past to the best of my knowledge we never paid rest as we never had a owner (landlord) but we paid our property taxes, now we have a unknown builder claiming to be have purchased the property and asking us to vacate. We have no option to leave. Any suggestion is most sked for..
In Maharashtra Pune,Same situations happen.IT people vacent flat but owner doesn’t not return their deposit. Neither government nor police take action on that serious fraud issues. I think in this situation media should wake up and all victims should stand against these courrpt owners.
Please help me , I am a student of Holkar science College in indore and present day I am in my home town biaora dis.rajgarh and my landlord tack rent of April, may,and June of 2020 I am not living in that room ,and he forced me to give the rent , he also take my coution money
When such rent authority will be fomed in kanyakumari dist which have many number of disputes
Thanks for such a law. When I stayed in Whitfield as a tenant , the owner created such a fuss while returning the deposit. He told that he normally returns the deposit a month after vacating, after getting all the repair and paint work done . He never informed us about it before . I really hope the henceforth it would be only 2months rent as deposit.
My friend in Karnataka the place called Davangere with door no. 788, Vijayalakshmi road, got over rented, a commercial Shop above that a commercial godown, in daily basis of 4 thousand rupees per day, in agreement landlord shown one amount and collecting out rated amount, my friend tried to convince rental department but failed, because of strong hold in politics of land lord, can some one suggest what steps to be taken to control it.