New Delhi: Union Finance Minister Nirmala Sitharaman had proposed several reform measures to promote rental housing in her budget speech. She said that the current rental laws are archaic as they do not address the relationship between the Lessor and the Lessee realistically and fairly.

Sitharaman had said that a model tenancy law will be finalized and circulated to the states.

The Draft Tenancy Model Act has been formulated to balance the rights and responsibilities of landlords and tenants through rental contracts.

It is neither a central bill nor an act of Parliament but a model/template for the states to adopt.

Key Features of The Draft Tenancy Model Act:

  • Revision of rent between the landlord and the tenant will be as per the terms of the Tenancy agreement and the landlord has to give a notice, in writing, three months before the revised rent becomes due.
  • The tenant will be deemed to have accepted whatever rent increase has been proposed by the landlord if the tenant fails to give notice of termination of tenancy.
  • The security deposit to be paid by the tenant in advance shall be subject to a maximum of two months’ rent in case of residential property and, minimum of one month’s rent in case of 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 a due deduction of any liability of the tenant.
  • The landlord or the property manager may enter premises in accordance with written notice or notice through an electronic medium given to the tenant at least 24 hours before the time of entry under certain circumstances mentioned in the act. The day and time of entry between 7.00 AM to 8.00 PM.
  • No landowner or property manager or tenant either by himself or through any other person shall cut-off or withhold any essential supply or services in the premises occupies by the tenant.
  • A landowner is entitled to get compensation of double of the monthly rent for two months and four times of the monthly rent thereafter, for the use and occupation of a premise by a tenant who does not vacate the premises after his tenancy has been terminated by order, notice or as per agreement.
  • The District Collector shall, with the previous approval of the State/UT Government, appoint an officer, not below the rank of Deputy Collector to be the Rent Authority.