The Union Cabinet has recently approved the Model Tenancy Act. The Act is expected to promote rental housing in the country by coming up with rules that are fair to both tenants and landlords.
The Union Cabinet approved the Model Tenancy Act (MTA) on June 2, 2021. It aims to streamline the process of renting a property in India in a transparent and accountable manner to facilitate the growth of the rental economy in the real estate sector. This article focuses upon the rationale for formulating the MTA, some of the legislation’s prominent features, and the challenges that lie ahead.
MTA seeks to address three core issues in the real estate sector. Firstly, the MTA (as and when adopted by the States) will replace the archaic rent control laws that prioritised a tenant’s interests over a landlord’s interests. The rent control laws introduced to safeguard tenants from exploitative landlords have evolved in a counterproductive manner by minimising rentals while real estate prices have soared. Secondly, the MTA aims to bridge the trust deficit between the landlord and the tenant. Thirdly, this legislation seeks to financially re-energise the renting portion of the real estate sector by encouraging landlords and tenants to rent and occupy such properties, respectively.
Please click here to read the full article by Bharat Bhushan Sharma published in 99 acres.
Bharat specializes in Real Estate and Corporate Advisory related matters. He has extensive experience in Real Estate related transactions including conducting of legal due diligence, drafting of lease deeds, leave and license agreements, joint development agreements and sale deeds.