By establishing the ground rules and regulations of tenancy in clear terms, the Model Tenancy Act, 2021 focuses to make an operative regulatory ecosystem in India to regulate landlord-tenant relationships.
Salient features of the Model Tenancy Act:
1) Creation of a three-tier redressal system: This Act will introduce Rent Authorities, Rent Court and Rent Tribunals. These regulatory institutions will be working to bring down the burden of tenancy disputes from the civil courts and help in rapid dispute resolution.
2) Security deposit demand capped: The Act has introduced a limit to the security deposit, which is to be paid by a tenant in advance to – a) not exceed a period of two months’ rent in case of residential properties, and b) not exceed period of six months’ rent in case of non-residential properties.
3) Rights and obligation of landlords and tenants: The customs of each group (landlords and tenants) are distinctly defined,which covers various elements including retention of original tenancy agreements, rents and other charges payable, repair and maintenance of the property, entry into properties, besides guidelines and duties of a property manager and outcomes on breach of necessary duties.
4) Eviction of tenants and recovery of possession of premises by the landlord: previously,the rent control acts of various states such as the Delhi Rent Control Act and Maharashtra Rent Control Act provided rules for expulsion that were highly debated in the court of law. This often led to long lasting legal actions . By limiting the rules for expulsion and discontinuation of tenancies, this Act focuses on bringing a stable approach in addressing these issues at the grass root level.
5) Role of property managers: The Model Tenancy Act, 2021 distinctly defines the role of property managers, their duties and the outcomes they face in case of any breaches. The Act will ask the property managers to enhance details like name, PAN number, Aadhar number, address and contact details registered with the Rent Authorities. Any individual or a legal entity, which includes the rental agent who takes action on behalf of the landlord to manage the properties and represents him in dealings with the tenant, has to be included here. This Act will provide better opportunities for property managers in the long run, specially in the residential sector.
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