What is the New Model Tenancy Act?
Union Finance minister Ms. Nirmala Sitharaman, in her budget speech this year had proposed to revamp the archaic tenancy law. In her proposal, she intended to help both the landlords and the tenants and create a better renting ecosystem. It includes setting up of Rent Authority, Rent Court and Rent Tribunal which will monitor and ensure adherence to tenancy laws by both the parties and settle disputes within 60 days. However, housing is a state subject and the enforcement of this law would be incumbent on states.
Highlights of The Proposal
Security Deposit
In a big relief to tenants the new proposed law caps the security deposit, which is a one-time refundable amount landlord ask as a cover for potential damage to their property during the tenancy period, to up to 2 months of rent for residential properties. Usually, in most of the cities, landlords demand anywhere between 5 months to 11 months of rent as a security deposit. This becomes a big deterrent in renting as young people who have either just started working or moved to a new city for studies find it extremely difficult to arrange for such a large sum at one go.
Mid-Year Rent Increment
According to the proposal, landlords can’t increase the rent mid-year without intimating tenant at least three months in advance. The three months time give tenants sufficient time to look out for other accommodation if they decide to discontinue. Mid-year rent increment and harassment are more common in PGs, Hostels, or where the apartment is maintained by middlemen or brokers.
House Maintenance
The obligation of normal wear and tear has always been on the landlord and this act re-enforces this. Which means routine maintenance like whitewashing and repair would fall upon the landlord and they can’t deduct a part of the security deposit for normal wear and tear issues.
Tenant’s Privacy
This was the prime reason why I started rentbaba.com, and I’ve written a detailed article on Quora- “Strangers in My House” . There have been multiple instances when landlords or their agents barged in the rented house without any notice to the tenants. The act proposes that the landlord will have to give written notice to the tenant along with the reason for the visit at least 24 hours in advance.
I believe the above issues were the main pain points for tenants across cities in India and the finance minister has tried to address just those. However, it’s not completely lopsided towards tenants and there is something for the landlords too. Among others, it provides very strict guidelines for the vacancy of the premise after the completion of the tenancy and the due compensation otherwise.
The proposal is currently open for consultations and once it comes into effect and implemented by the states, the rental housing market should see an increased trust between the two parties. The setting up of Rent Court and Rent Tribunal would ensure disputes are settled in quick time.
I will keep updating this post once I get more information about the development in this area. Meanwhile, if you have any query please shoot them in the comments section.
Update: The states are yet to setup the authorities as mentioned in the draft act. Given the lack of seriousness the states have shown in this sector, it’s unlikely that the system will be setup anytime soon. Till then it’s status quo. However, if you want to highlight and issues, or praise your landlord and stay, follow the link below and write a review or your rental stay.
R. Guha
November 15, 2019 at 6:29 pmHi,
If the rented accommodation I am living in, inside a residential complex, has dirty and unhygienic tap water causing disease, as a tenant, do I have rights to seek compensation from the landlord for the purchase of bottled water?
admin • Post Author •
November 15, 2019 at 6:35 pmDoes you rental agreement specifically mention that the house will have clean drinking water supply?
In my experience I have seen many tenants purchasing bottled water but landlords do not necessarily compensate for that.
Kameswara Rao
February 29, 2020 at 8:29 amI have a independent house. There is no rental agreement. My tenant refusing to vacate the house. He is not paying enhancing rent. He is paying at his will. What can I do please guide me.