Model Tenancy Act aims at resolving rental housing dispute, boost to “Housing for All”
Through Union Budget 2019, the Government has envisioned for inclusive growth by targeting multiple sectors in the nation. Amongst them, one that has surprised many is “Model Tenancy Act”. It has been well received by real estate developers and is touted to be in the direction of the Government’s ambitious initiative “Housing for All” by 2022.
Jayesh Dave, MD Chairman of Jayraj Builders Vadodara, says that at present the rental market in India faces a lot of issues. There has been a lack of attention for proper legislation and conflicts between owner and tenant remain quite common. Policy formulations are always a plus in any sector and this step by the Government of India can bring a lot of transparency in the rental housing.
Emphasis has been given to speedy redressal of the disputes by specifically outlining the responsibilities of both the landlords and tenants. There is a proposal for Rent tribunals to hear appeals for matters connected to disputes over rental housing. With a defined rental policy in place, opportunities for students, working professionals to find accommodation becomes easy.
The rental housing market in India remains an underdeveloped sphere despite acute housing shortage. Major factors are often contributed to drawbacks such as lack of rental policy and low rental yield. There was thus the need for a government initiative to counter such drawbacks. With Model Tenancy Act, 2019, the government has laid down the following new objectives:
- Security deposit shouldn’t exceed 2 months in residential and one month in non- residential properties.
- In case of termination of the rental agreement by an order, notice, the tenant must vacate the premises. Failure to do so, will entitle landlord to receive the compensation of double the monthly rent for two consecutive months.
- The property owner must give prior notice of 3 months before revising the rent value.
Mr Jayesh Dave said, with these objectives the government is trying to resolve the much disputed premise in India. These objectives have the potential to aid Government’s ambitious initiative “Housing for All”. However, the Act is not binding on the states as the urban development is a state subject as per the federal system of India. It is still to be seen if the states choose to implement these guidelines.
Rental Housing concept is significant in most of the developed nations and if implemented well, it can boost the current situation and transform the way rental housing concept is perceived in India. It is important that states scrutinize the points outlined in this initiative and implement them in the rental housing market to bring transparency and benefits to the consumers.