Model Tenancy act arrives: Only two months rental deposit, quick dispute resolution

Jun 03,2021

The recently approved Model Tenancy Act is aimed at overhauling the legal framework that governs the renting of houses. According to officials, the Act will balance the rights and interests of the house owner as well as the tenant and also avoid possible disputes by clarifying the roles and responsibilities of both the parties.

‘Housing for All’

The act is expected to encourage owners to rent out their property without the fear or apprehensions that the tenants won’t vacate it later and continue to illegally occupy it. Quoting Census 2011, Union Minister Hardeep Singh Puri said that over one crore houses were lying vacant across the country.

Responsibility of owners and tenants

• Under the act, unless agreed otherwise in the agreement, the landlord will be make all the structural repairs, whitewashing, external electrical wiring and related maintenance when required.
• The tenants, on their part, will be responsible for drain cleaning, switches and socket repairs, kitchen fixtures repairs, replacement of glass panels in windows, doors and maintenance of gardens and open spaces, among others.
• Landlord cannot visit his/her rented property without giving a 24 hours notice. The visiting hours should be between 7 am to 8 pm.

Security deposit limits

• House owners are mandated to seek a maximum of two months’ rent as security deposit from tenants.
• For commercial property, the tenants are required to pay security deposit for upto six months.

Parallel Court

• Reducing litigation, the Act also provides for a faster dispute resolution by creating a rent authority, a rent court, and a rent tribunal. These cases will not come under the jurisdiction of civil courts.
• State and UTs are allowed to adapt the act by enacting fresh legislation or amending their existing rental laws suitably.