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

Power arcade: amphibious technology - Photostory

The latest marine defence technology systems from around the world

Updated On: 28 Oct 2025 | 4:36 PM IST

Quad exercise 2025: India to host first-ever joint air drill

The exercise will be led by India and the US, with Japan and Australia participating as observers. Japan had previously joined as an observer in Cope India 2023

Updated On: 27 Oct 2025 | 9:06 PM IST

Bank nomination rules amended to align with will, avoid disputes

For deposits, nominee shares should mirror the division in the will; for lockers, the order should match the will

Updated On: 27 Oct 2025 | 7:18 PM IST

Gold loan or gold overdraft? Know the smarter way to borrow against gold.

Gold loans offer structure, overdrafts offer flexibility. Here's how to pick the smarter way to borrow against your gold.

Updated On: 27 Oct 2025 | 7:08 PM IST

H-1B visa's ugly truth: Firms don't look to hire Americans, says investor

US entrepreneur James Fishback says American tech firms should stop hiring skilled workers from India and rely on domestic talent instead

Updated On: 27 Oct 2025 | 7:00 PM IST

Missed something in your ITR? You can still correct it with ITR-U

The extended four-year window under ITR-U gives taxpayers a chance to fix past errors, but use it wisely, say experts.

Updated On: 27 Oct 2025 | 4:52 PM IST

Drone Strike By India Devastates NSCN(K-YA) Camps

In a major counter-insurgency operation, India carried out a precision drone strike deep inside Myanmar's Sagaing Region, targeting terrorist camps operated jointly by the NSCN(K-YA), ULFA(I), and PLA

Updated On: 27 Oct 2025 | 3:33 PM IST

Volume Icon

India is 'not a tool in anyone's hands' - BP Podcasrs

India's former Foreign Secretary, Kanwal Sibal, tells Blueprint why the commonly stated idea of the United States (US) seeing India as a bulwark against China does not reflect India's priorities.

Updated On: 24 Oct 2025 | 11:25 PM IST

Pace of volume recovery key for gains in Hindustan Unilever stock

Net sales grew 2.1 per cent year-on-year (Y-o-Y) to Rs 16,060 crore, while underlying volume growth (UVG) was flat Y-o-Y. Total revenue rose 2 per cent Y-o-Y to Rs 16,250 crore

Updated On: 24 Oct 2025 | 8:04 PM IST

Piyush Pandey passes away, Kurnool bus tragedy, Blackstone to buy stake in Federal Bank & more

Piyush Pandey, one of India's most influential advertising professionals, passed away on Friday at the age of 70. He created iconic campaigns for brands like Asian Paints, Cadbury, and Fevicol, and al

Updated On: 24 Oct 2025 | 8:02 PM IST

IPO Calendar: Quiet week ahead with 3 new issues, no listings scheduled

Only one mainboard issue is scheduled to open for public subscription, while two new public issues will open for bidding in the SME segment

Updated On: 24 Oct 2025 | 8:00 PM IST

Sebi bars MFs from pre-IPO placements, allows only anchor investments

Cautions on risks of holding unlisted shares if listing fails

Updated On: 24 Oct 2025 | 7:57 PM IST

Ind Vs England Test match live update

Ind Vs England Test match live update from today

Updated On: 24 Oct 2025 | 2:15 PM IST

HAL's Survival Strategy: Transform Or Perish In India's Evolving Defence

HAL's Survival Strategy: Transform Or Perish In India's Evolving Defence

Updated On: 21 Oct 2025 | 4:38 PM IST

Hot waters - India and Pakistan flex their muscles in the Arabian Sea

Operation Sindoor revealed how maritime power - not missiles or borders - now defines the next phase of the India-Pakistan rivalry

Updated On: 16 Oct 2025 | 3:19 PM IST

'The India-Pakistan hyphen disappeared in 1999 and hasn't returned'

Business Standard presents the inaugural edition of the Blueprint Podcast

Updated On: 16 Oct 2025 | 2:49 PM IST

In the glow of the afterburner - Insights

As India bids farewell to its first supersonic fighter jet, the MiG-21's final flight marks both the end of an era and a warning for the future

Updated On: 16 Oct 2025 | 2:01 PM IST

Mega parade showcases China's global ambitions -Opinion

Beijing's September 3 military parade showcased advanced indigenous weaponry, strategic deterrence, and global posturing, even as questions linger over operational readiness and command cohesion

Updated On: 16 Oct 2025 | 1:57 PM IST

French general 'interested in learning' about India's long-range weapons

France looks to India's homegrown rocket and drone systems for next-gen artillery upgrades

Updated On: 16 Oct 2025 | 1:50 PM IST

From Iron Dome to Star Wars, it is now India's turn - Insights

Sudarshan Chakra fuses shield and sword into one doctrine of power, but its broad contours are unclear

Updated On: 16 Oct 2025 | 1:31 PM IST