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Recent Developments in Rent Sector

 

Desk Team LawDocs

1.  Model Tenancy Act, 2019

The new tenancy Act describes the rights and duties of the landowner and the tenant in a detailed manner. The landlord can file for recovery of possession of the premises in the Rent Court. If the tenant has not paid the rent, and is unwilling to evacuate the premises. Then the rent will be calculated as it is up to 6 months which will have to be paid by the tenant as provided in Section 22 of this Act.

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1 The landlord cannot charge more than two months rent as the security deposit for residential buildings. And not more than one month’s rent for commercial buildings.

2 7. After the commencement of this Model Act, a tenant – without the

3 2. The National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Bill, 2019

4 Related

The landlord cannot charge more than two months rent as the security deposit for residential buildings. And not more than one month’s rent for commercial buildings.

1. The new draft Model Tenancy Act, 2019 aims to cap security deposits at two months’ rent for housing and one month’s rent for other properties. However, “although well-intentioned, this cap may hurt landlords in cities where much larger security deposits have been the norm. A two-month security deposit will also not be enough to compensate the landlord if significant damage has been done to the property. 

2. The Act seeks to penalize recalcitrant tenants for refusing to move out of their rental properties after the agreed-upon rental period expires. The landlord will be able to claim double of the monthly rent for two months and four times of the monthly rent after that as compensation. This will put to rest one of the biggest fears of property owners who do not want to risk letting out their properties in India.

3. The Act stipulates that a landlord cannot refuse to provide essential utilities and access to common facilities. This has been a fairly common grouse of tenants in the past.

4. The landlord will also not be able to increase the rent without giving at least three months’ notice to the tenant, and cannot increase rent in the middle of a rental term.

5. Once this Model Act comes into force, no person will be able to let or take on rent any premises except by an agreement in writing.

6. Within 2 months of executing the rental agreement, it will be mandatory for both landlords and tenants to intimate to the Rent Authority about this tenancy agreement. The Rent Authority, within 7 days, will issue a unique identification number to both the parties.

7. After the commencement of this Model Act, a tenant – without the

prior consent in writing of the landowner – won’t be able to sublet whole or part of the premises held by him, or transfer or assign his rights in the tenancy agreement or any part thereof.

8. The terms of agreement executed between a landlord and his tenant will be binding. Upon their successors in the event of the death of the landowner or tenant. In such a case, their successors will have the same rights and obligations. As agreed in the tenancy agreement, for the remaining period of tenancy.

9. It should be noted that the existing tenancies will not get impacted as the Draft Model Tenancy Act will be applicable prospectively.

10. The Central government has shared a copy of the Model Act. With the States and Union Territories (UTs) for their views and comments. The Act, once finalized, will be shared with the States and UTs for adoption.

Industry experts, however, fear that much like in the case of RERA. The rental Act rules are prone to dilution at the state level, since land is essentially a state subject.

The Model Tenancy Act, 2019 may turn out to be a toothless tiger if this happens. And the Centre must ensure that modification of the rules does not happen beyond a reasonable limit.

2. The National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Bill, 2019

This law allows the residents of unauthorized colonies in the NCR region with valid documents. Like power attorney and sale agreement to obtain right of ownership. It also allows Delhi Development Authority to notify a colony for regularisation.

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