The Model Tenancy Act of 2021 protects both landlords and renters’ rights.
On Wednesday, June 2, 2021, the Union Cabinet passed a new Model Tenancy Act. The 1.1 crore abandoned dwellings discovered locked and unoccupied in the 2011 census are the key catalyst for this. This figure is likely to have increased in the last ten years. This model legislation must now be recognized and adopted by all states and Union territories, who will then announce the legislation in accordance with their own criteria.
The new tenancy legislation is a model Act developed by the Union, and each state and Union territory must pass their own version. All tenancy agreements must be registered with the authority and given a unique registration number. The registration agreements, together with any other documentation that the Rent Authority considers necessary, will be posted on the Rent Authority’s website.
At the district level, there will be separate tenancy and adjudicating bodies, as well as Rent Courts. This might cut down on the time it takes for a disagreement to be resolved. In reality, if a renter overstays his or her lease, he or she must pay twice the rent for the first two months and then four times the cost for up to six months. The Rent Authority has the authority to enforce this.
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Prospective law: refers to legislation that is designed to solve issues that may arise in the future. Property managers, who can operate on behalf of both landlords and renters, are mentioned specifically. This is a unique feature that has the ability to provide additional services to both the landlord and the renter. It goes beyond the typical property brokerage services available today.
The Rent Agreement will be signed twice, with one copy kept by the landlord and the other by the renter. Receipts for rent and other payments are required from landlords. Bank slips will suffice in the event of electronic transfers.
The length of the tenure is up to the tenant and landlord to decide. Renewal must take place during the tenancy tenure. Both the renter and the landlord have a three-month notice period. Subletting is only permitted with the signing of a supplemental agreement. The rent increase must be justified by the lease agreement. On mutually agreed circumstances, the landlord can request increased rent from renters who resided before the commencement of the construction for alterations, repairs, or enhancements.
The amount of advance rent a renter must pay the landlord is limited to two months for residential properties and six months for commercial properties. After deductions for tenant liabilities, this will be returned to the tenant.
Disputes: In the event of a disagreement between the landlord and the tenant, the Rent Authority can determine the rent.
If the landlord refuses to accept the rent during a dispute, the tenant has two months to transmit it via money order before depositing it with the Rent Authority. If the renter is unsure who should get the rent, it can be placed with the Rent Authority, who will determine who should get it. No matter what claims the tenant makes, withdrawing a sum equal to the agreed rent does not represent an acknowledgment against the landlord.
Both the landlord and the tenant share responsibility for keeping the property in the same condition as it was when the tenancy began. The rental agreement should include provisions for common area repair and upkeep. During the lease, the tenant is responsible for the administration and repair of the premises. If the tenant fails to make agreed-upon repairs, the landlord may use the deposit money to make the repairs. The renter must repay it within a month after receiving the landlord’s notice.
If the landlord fails to make necessary repairs, the tenant may do so and deduct the cost from the rent, as long as the cost is less than half of the monthly rent. If the premises are uninhabitable and the landlord refuses to fix them, the tenant has 15 days to quit after filing a written complaint.
Force Majeure: If the premises become uninhabitable owing to a force majeure event, the landlord is prohibited from charging rent until the situation is resolved. If this is not practicable, the rent advance and security deposit must be reimbursed within 15 days after the notice period’s end, after tenant responsibilities have been deducted.
Landlords must provide tenants 24 hours’ notice if they want to examine the property, make repairs, or do anything else stated in the leasing agreement. The purpose for entrance must be included in the notification. This entry cannot be made before or after sunrise or sunset. This criterion is waived in the event of an emergency, such as a flood or a fire.
Property Manager: The job of the property manager is covered in full in the Model Act. This is a novel concept in India.
The landlord cannot refuse to provide essential services. This comprises water, electricity, and piped cooking gas, as well as lighting in communal areas, elevators, parking, and communication and sanitary connections. The Rent Authority may issue orders to reinstate it if he does so. However, an investigation must be conducted and completed within a month.
If the tenant’s complaint is genuine, the landlord may be required to pay two months’ rent as compensation for failing to provide necessary services. If the tenant’s objection is frivolous, he or she must pay the landlord two months’ rent as a penalty.
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Eviction is a critical issue in regaining landlord trust in bringing idle inventory into the rental market. The Rent Court can issue eviction orders based on a landlord’s plea if:
o The tenant fails to pay the rent stipulated in the Tenancy Agreement.
o The tenant fails to pay the two months’ rent, plus interest and service costs, within a month after receiving notice.
o If the renter sold away part or all of the property without the landlord’s explicit permission
o If the tenant continues to abuse the property after the landlord has presented him with a notice
o If the space has to be changed, repaired, or redeveloped. Only once a new Tenancy Agreement is recorded with the Rent Authority may tenants return. The renter may be permitted to stay in part of the property if the landlord agrees.
o Tenants can be evicted if they provided the landlord written notice of vacation and the landlord arranged the sale or repair of the property, or if they built a permanent construction without the landlord’s authorization.
o Non-paying renters cannot be served with an eviction notice if they pay the whole arrears plus the compensation sum within a month after the Rent Court’s notification. If the renter fails for two months in a row within a year, he will not be allowed the relief again.
o If a landlord dies and the legal heirs can show that the premises are needed, the tenant may be served with an eviction notice by the Rent Court.
If the tenant does not evacuate the premises within the Rent Agreement’s term, he must pay twice the monthly rent for the first two months and four times the rent for the remaining months.
After subtracting the rent amounts and charges owing to him, the landlord must restore the advances and security deposits when he takes possession of the premises. Failure to do so will result in simple interest being charged on the amount owed to the renter, or at the rate set from time to time.
If the tenant opposes the landlord’s claim in Rent Court, he will be required to pay increased rent and other expenses to the landlord until the matter is resolved.
The Rent Court may order the separation of the land from the tenanted property and modify rent accordingly if there is a piece of land where the landlord or his legal successors can develop it further in compliance with municipal legislation. A month is provided to the tenant to make changes.
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