Blog Details

Author - Associate Kantika Mukherjee and Advocate Karthik Raghavan

The Ministry of Housing and Urban Affairs (MHUA) recently released the draft Model Tenancy Act, 2019, which proposes to regulate rental housing through a market-oriented approach. It states the obligations of tenants and landlords and offers an adjudication mechanism. Once enforced, the Act will be applicable to premises let out for residential, commercial or educational use, but not for industrial use.

Salient Features of the Act

• The Act states the responsibilities of tenants and landlords and furnishes for an adjudication mechanism for disputes.
• It aims to balance the interests of the owner as well as a tenant through establishing an adjudicating mechanism for speedy dispute redressal and towards establishing Rent Court and Rent Tribunal to hear pleas and for matters connected towards rental housing.
• The Act commands that no individual would let or take any rental premises without an agreement in writing, in both urban as well as rural areas.
• The renting out of the premises has to be carried out through an agreement in writing and filed with the Rent Authority by the landlord and tenant within a period of two months from date of agreement.
• Both landlord and tenant have certain obligations to fulfil, for instance, landlord is under an obligation to keep the premises in a good condition, get repairs done for common facilities in case tenant refuses and in case landlord refuses tenant can get the work done and seek deduction from rent.
• During tenancy, tenant should not intentionally or negligently damage the premises, notify landlord of the same and take care of the premises and its contents.
• It will be applicable prospectively and will not affect existing tenancies.
• It provides robust grievance redressal machinery comprising of Rent Authority, Rent Court and Rent Tribunal.
• Landlords cannot ask for a security deposit for more than two months in the case of residential premises. In the case of non-residential premises, a minimum of one month’s rent which needs to be charged as security deposit.
• Further, landlord is not permitted to increase the rent during tenancy period, unless the amount to calculate the proposed increase is indicated in the agreement.
• The States/Union Territories may make rules to carry out the provisions of the model law and existing rent control laws would stand repealed from the date enforcement of this model law.

Dispute Resolution

As stated above, the model law aims to set up Rent Courts & Rent Tribunals for resolving landlord-tenant related disputes. Until now, landlords and tenants approached civil courts for adjudication. However, the model law states that only the Rent Court will have jurisdiction to resolve these matters and not Civil Court. If a dispute arises between landlord and tenant, both parties should first approach the Rent Authority. Aggrieved, party can file an appeal before Rent Court and thereafter, an aggrieved party can file another appeal before Rent Tribunal. The limitation period for filing an appeal in both courts is 30 days and cases in both courts must be disposed off in 60 days.