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MODEL TENANCY ACT, 2021

                 MODEL TENANCY ACT, 2021

In June 2021, union cabinet approved the Model Tenancy Act, 2021 for circulation to States and union territories for adoption by way of enacting new legislations or amending existing rental laws.

                Since ‘land’ is in the state list of constitution, laws passed by the union government are not applicable in all states, unless the states and Union Territories adopt it. Government has only directed them with guidelines. 

About The Act

                         The act aims to govern landlord tenant relationships. The prospective of this law is that it will not affect existing tenancies or a dispute; i.e. it is not retrospective in nature. . It will not be applicable to hotels, lodging houses, dharamshalas, premises for industrial use, premises owned by union or state government, union territories, local authorities or statutory bodies, premises owned by companies, premises owned by religious or charitable institutions. 

                This act mandates the return agreement between tenant and landlord. The made agreement will be submitted to concerned district rent authorities. Rent authorities will be established to regulate renting of my premises and to protect interests of landlords and tenants. This agreement must include – 

  • Time, 

  • Rent payable 

  • Terms and periods for revision of rent, 

  •  Terms of security deposit, 

  • Reasonable cause for the entry of landlord into premises 

  •  Responsibilities to maintain premises

This will apply to residential as well as commercial purposes. This act also has provisions for security deposits. According to this Act, security deposit should not exceed 2 month for residential premises and 6 month for the non residential premises. The act states that subletting of property may be made only with the permission of landlord. Tenant and landlord have to inform rent authority about Sub-Tendency.

                Tenant can request for renewal of the tendency period as mentioned in the agreement. If the tenancy period has ended and not been renewed or the tenant fails to vacate the premises after period of tenancy is over, then the tenant will be liable to pay compensation. He/she will be liable to pay twice the monthly rent for first 2 months and four times the rent after 2 months, in failure of leaving the premises after the end of Tenancy period. The act states that the tenant shall not make any structural or permanent changes without the consent of the Landlord. 

Resolving Dispute under this Act

To resolve any dispute, a three tier resolution has been drafted. It is a quasi-judicial mechanism. At the top we have the rent authority, appointed by district collector and approval of state government. We then have the rent court appointed by district Collector and approval by the state government. And at the end, we have, the Rent tribunal set up by the state government after consulting High Court.

The Civil courts will not have any jurisdiction over the matters under model tenancy, 2021. It is mentioned that the landlord cannot stop any essentials applied to the mental premises occupied by tenant.  While filing rental agreement, mandate submission of aadhar card of both tenant and landlord is necessary.  
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