MoHUA drafted MTA to regularise rental housing

NEW DELHI: In a bid to balance the interests of both landlords and tenants, the Ministry of Housing and Urban Affairs (MoHUA) came up with the Model Tenancy Act (MTA), 2019. As per the Ministry, the new drafted MTA will help to enhance the overall legal framework in terms of rental housing across the country and may also push the involvement of private sector in this segment.

According to the new MTA 2019, in case of residential properties the security deposit is capped to a maximum of two months’ rent and in case of nonresidential property a minimum of one month’s rent. The drafted act also include penalty to be imposed for failure to vacate a residential unit. The landlord is entitled to get a double the rent as a compensation for two months and if the tenant does not vacate after the tenancy has been terminated by order, notice or as per the agreement then the landlord is liable to get four times of the monthly rent. Also, the rent cannot be hiked in the middle of the tenure. If in case the landlord needs to increase the rent, then he/she needs to give a prior notice of at least three months before implementing the revised rent.   

To take care of the basic services’ supply for the tenant, the MTA states that the landlord in no circumstances cannot cut-off or withhold the basic services’ supply like water and electricity. Rectification of structural damages and works like whitewashing, painting is the responsibility of the landlord.

Durga Shankar Mishra, secretary, Ministry of Housing and Urban Affairs (MoHUA), said that the states have been asked to renew their tenancy policies by July 26 and submit the same. He further added that the transparency and equitable law (MTA) will encourage more people to rent out their properties and will help tenants to be fear-free of those sudden rent hikes and demands by landlords.

Further detailing about the act and the process Mishra said, rent law is basically a state subject. All the states have either 60s, 70s or 80s’ rent laws. These laws majorly focus on protecting the rights of tenants and not much is mentioned about landlords. Therefore, the Government of India, in a bid to create a more equitable law drafted the MTA. Once, the Union Cabinet approves the MTA then we will direct the states to either implement the MTA or amend their existing laws in line with the MTA.