Rental housing is an unregulated area and the terms of various aspects related to renting vary from place to place. To bring uniformity in these aspects, the Union Government has come up with a ‘Model Tenancy Act’, which the cabinet recently approved. It is up to the states to enact legislation in line with the model act. Here is an explainer on the provisions of the model act. On 02 June 2021, the Union Cabinet approved the ‘Model Tenancy Act, 2021’ for circulation to all States and Union Territories for adaptation by way of enacting fresh legislation or by suitably amending the existing rental laws. According to the Union Government’s press release, the Act will help overhaul the legal framework with respect to rental housing across the country, which would help spur its overall growth. The press release added that the ‘Model Tenancy Act’ aims at creating a vibrant, sustainable, and inclusive rental housing market in the country. It is supposed to enable the creation of adequate rental housing stock for all the income groups thereby addressing the issue of homelessness. Further, it is expected to institutionalize rental housing by gradually shifting it towards the formal market and establishing a Rent Authority. We look at the model act in detail in this story. Draft Model Tenancy Act was released in 2019 In her maiden budget speech in 2019, Finance Minister Nirmala Sitharaman announced that several reform measures would be taken up to promote rental housing as the current rental laws were archaic and did not address the relationship between the Lessor and the Lessee realistically and fairly. She announced that a Model Tenancy Law would be finalized and circulated to the States. The draft Model Tenancy Act 2019 was released. According to Census 2011, there were about 24.67 million vacant houses of which around 11.09 million houses were in Urban parts of India. That is, over 1.1 crore houses were vacant in Urban areas and so, making these houses available for rent would complement the vision of ‘Housing for All’ by 2022. While the latest numbers are not available, a significant number of houses may still be vacant, especially in the urban areas. What are the objectives of the Act? The Model Tenancy Act, 2021 stipulates the following objectives- The act which streamlines the process of renting a property in the country would be applicable prospectively and does not affect the existing tenancies. The States are advised to draw upon the model act and pass their own tenancy acts. The Model Act talks about establishment of Rent Court and Rent Tribunal The Act defines the landlord also known as landowner or lessor as – The tenant or lessee is described as: Rent authority has been defined as the officer appointed by the District Collector (DC) or District Magistrate (DM) with the approval of the respective State government or UT Administration. Likewise, an Additional Collector or Additional District Magistrate or an officer of equivalent rank appointed is to be appointed as Rent Court. District Judge or Additional District Judge may be appointed by the State government/UT Administration as Rent Tribunal in each district. Both, the Rent Court and the Rent Tribunal are bestowed with the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 for discharging their functions. Rent agreement is mandatory The ‘Model Tenancy Act’ stipulates that a written agreement is mandatory between the landlord and the tenant for all new tenancies. The execution of the agreement must be informed to the concerned district ‘Rent Authority’ by the landlord and tenant jointly within two months from the date of the agreement. Following receipt of information, the Rent Authority will provide a unique identification number to the parties and upload details of the agreement in the local vernacular language or state/UT’s language within one week. Tenure may be extended in event of force majeure The tenure of tenancy is as specified in the agreement. In case, the tenant fails to vacate the property despite the end of tenancy, they are liable to pay twice the monthly rent for the first two months and four times the monthly rent thereafter until the tenant occupies the property. In case of calamities, or a situation of war, then the landlord shall allow the tenant to continue in possession of the said premises till a period of one month from the date of ceasing of the disastrous event on the same terms and conditions of the tenancy agreement already entered into. However, the list of force majeure events mentioned does not include pandemics or does not link the agreement to a notified disaster as in the case of COVID-19.