image

Model Tenancy Act

About Model Tenancy Act

Facebook IconLinkedIN Icon

What is Model Tenancy Act?

The central government on June 3 approved the Model Tenancy Act for circulation among states and union territories, which will adopt the changes by amending their existing rental laws in the country. According to 2011 Census data, there is a demand for 18.8 million homes in urban areas. The proposed reforms are much-desired relief to tenants and homeowners alike.

In her Budget speech of 2019, Finance Minister Nirmala Sitharaman said the current rental laws are archaic, as they do not address the relationship between the lessor and the lessee fairly. The approved Model Tenancy Act seeks to address the distortions in the rental market and help modernise it.
 
The new rules will help people especially in urban areas where about 28 per cent of families live on rent.
 

Here are the following changes in the Model Tenancy Act:

1: The Act will be applicable for renting only residential, commercial, or educational use, but not for industrial use or the hospitality sector.
 
2: In a major breather for tenants, the Act caps security deposit to a maximum of two months of rent.
 
3. According to the new Act, the rent can either be hiked according to the terms in the rental agreement or the landowner shall be required to give a notice in writing three months before.
 
4. The Model Act imposes that the information filed with the Rent Authority shall be taken as evidence of facts related to the tenancy.
 
5. In case the tenant does not vacate the premises on time, the Act proposes to levy heavy charges. A landowner is entitled to get compensation equal to double the monthly rent for two months, and four times the monthly rent, thereafter.
 
6. The new Act makes a robust grievance redress system comprising Rent Authority, Rent Court, and Rent Tribunal, which will settle disputes within two months.
 
The earlier Rent Control Act was an attempt by the government to eliminate the exploitation of tenants but in the long run, these laws have gathered operational inefficiencies and have led to several adverse situations, including weakening investments in rental housing, deteriorating municipal property tax revenue, and so on. However, unless individual states implement the rules, the benefits may not reach the people.
 

Landlord and tenants: Key highlights of the rules of engagement

— Both landlords and tenants must insist on a rent agreement signed by both parties
— Without it, getting redress from the Rent Authority will not be possible
— Read the rent agreement before signing on the dotted line to avoid unpleasant surprises later
— Landlords should verify a tenant´s background
— This would include getting records of civilian and criminal courts, and address and identity proof checked (many agencies do this)
— Tenants should pay rent via digital mode to create a payment trail

Here are the latest news from Business Standard

Latest News

Regulations alone can't save you if you don't protect yourself: BSE CEO

On regulatory expectations, the BSE remarked that there is a general perception that regulators are blamed when investors lose money

Updated On: 24 Apr 2025 | 8:55 PM IST

Fitch cuts India growth estimates to 6.4% amid ongoing global trade war

Fitch also cut the world growth projections in 2025 by 0.4 percentage points and China and US growth by 0.5 percentage points

Updated On: 23 Apr 2025 | 5:23 PM IST

3 Kerala HC judges, families narrowly escape Pahalgam terror attack

Three Kerala High Court judges and their families escaped unhurt after leaving Pahalgam just hours before a deadly terror attack that claimed 26 lives and injured many

Updated On: 23 Apr 2025 | 5:06 PM IST

IPL 2025: Why SRH and MI players are wearing black armbands today?

SRH and MI players to wear black armbands in Wednesday's IPL match to honour Pahalgam terror victims. BCCI cancels cheerleaders, fireworks; cricket world stands in solidarity

Updated On: 23 Apr 2025 | 4:58 PM IST

Mumbai airport's Terminal 1 can be demolished in a phased manner: AAI

MIAL wants to demolish entire Terminal 1 in one go

Updated On: 23 Apr 2025 | 4:00 PM IST

Govt offers cheap loans for arms, eyes Russia's traditional customers

New Delhi will also sharply increase the number of defense attaches in its foreign missions as part of a new programme that will see the government directly negotiate some arms deals

Updated On: 23 Apr 2025 | 11:11 AM IST

Gensol Engineering independent director Arun Menon quits amid Sebi probe

Arun Menon resigns as independent director of Gensol Engineering, a day after Sebi barred the firm and its promoters over alleged fund diversion and governance lapses

Updated On: 17 Apr 2025 | 1:05 PM IST

Bombay HC takes on record consent terms entered into by Lodha brothers

The court appreciated the role played by the mediator, retired Supreme Court judge Justice R V Raveendran, in the process

Updated On: 16 Apr 2025 | 8:16 PM IST

Google layoffs go global; India team likely to see role adjustments

This comes amid reports of search giant Google laying off employees from its Platforms and Devices division, including teams working on Android software and Pixel smartphones

Updated On: 16 Apr 2025 | 7:12 PM IST

Aegis Vopak Terminals gets Sebi nod to float ₹3,500 crore IPO; key details

Aegis Vopak Terminals IPO is entirely a fresh issuance of equity shares with a face value of ₹10 apiece amounting to ₹3,500 crore

Updated On: 16 Apr 2025 | 2:44 PM IST

Waqf Amendment Act in SC today: 73 petitions filed, 7 states defend law

The Supreme Court will hear 73 petitions today challenging the Waqf Amendment Act, as seven states defend its constitutionality and petitioners raise concerns over religious autonomy

Updated On: 16 Apr 2025 | 1:46 PM IST

Gold price dips ₹10 to ₹95,170, silver price falls ₹100 to ₹99,700

The price of 22-carat gold declined ₹10, with ten grams of the yellow metal selling at ₹87,190

Updated On: 16 Apr 2025 | 10:21 AM IST

Indian companies file $2.82 billion ECB plans with RBI in February 2025

Among the prominent firms that filed intent in February 2025 with the RBI is Tata Steel Ltd, for $750 million, for overseas investment in joint ventures and wholly owned subsidiaries

Updated On: 16 Apr 2025 | 10:17 AM IST

test article

test

Updated On: 16 Apr 2025 | 4:20 AM IST

trade uncertainties to hurt business confidence, growth in Asia: Moody's

The tariff pause does not reverse the trend of de-globalisation but increases trade policy uncertainty, as the Trump admin's goal of reshoring manufacturing supply chains to the US remains unchanged

Updated On: 15 Apr 2025 | 6:25 PM IST

India's capital goods sector is expected to post

This comes even as a broader revival in public and private

Updated On: 15 Apr 2025 | 6:06 PM IST

G-7 central banks prepare first policy responses to Trump tariffs chaos

Against a backdrop of rising Treasury yields, weaker dollar and slumping stocks tied to US trade policy, investors will be seeking clues from Fed policymakers on their appetite for lower interest rate

Updated On: 15 Apr 2025 | 5:50 PM IST

India to significantly cut tariffs before April 2 deadline, claims Trump

India to lower tariffs ahead of US-imposed reciprocal duties on April 2, President Donald Trump claims, adding nations are now reducing unfair trade barriers against American exports

Updated On: 15 Apr 2025 | 4:43 PM IST

₹US tariffs: Recessionary phase not ruled out in key economies, says Montek

₹The rise in tariffs will raise prices in major economies and trigger an economic slowdown, possibly even prompting a recessionary phase, says Montek

Updated On: 15 Apr 2025 | 4:28 PM IST

India vs Bangladesh HIGHLIGHTS, Champions Trophy

IND vs BAN HIGHLIGHTS: Shubman Gill (101 not out) completed his second consecutive century in ODI cricket to take India over the line in 229 runs chase

Updated On: 15 Apr 2025 | 4:26 PM IST