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Union Cabinet approves the Model Tenancy Law

Union Cabinet approves the Model Tenancy Law

After waiting a period of over 6 years, after being first introduced by the Centre, the Union Cabinet on Wednesday (June 2, 2021) sanctioned the Model Tenancy Act, which focuses to protect the interest of both tenants and landlords.

The Government considers this a model law, which states can adopt and enact. This law opens up a large number of residential and commercial properties for rental needs and purposes as the legal identity will eliminate the fear of owners losing their properties.

Housing and Urban affairs ministers, Hardeep Singh Puri, stated that States have the option to choose to adopt this policy.

The Model Act states that the rent and the period of the tenancy will be decided by the mutual consent between the owner of the property and the tenant that’s about to move in. it further states the security deposits for residential properties won’t be more than that of 6 months.

The Act further elucidates to revision the rent, the landlord needs to give written notice to the tenants before 3 months. It suggests that if the tenant, by any chance, does not vacate premises after the tenancy expires, the landlord is eligible for compensation.

Similarly, the landlord can’t use force to evict the tenant during the contract period. 

The law is applicable for prospective contracts, owners of commercial properties in Delhi, Mumbai and Kolkata, who has rented out properties decades back and have been getting meagre rents, won’t get any benefit.

According to model law, states will have to set up “rent courts” which will significantly hear disputes regarding the rent and tenancy and the cases will be completely heard in sixty days.

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