Commerce Dashboard

Go Back

Tenancy law fixes rent agreement rules on rent increase, security deposit.

IBEF:  July 12, 2019

The Centre has proposed a Model Tenancy Law to control renting of premises and the current rental laws are also archaic as they do not address lessor-lessee relationships fairly. Once prepared, the new tenancy law will be passed to state governments, as per Ms Nirmala Sitharaman, Minister for Finance and Corporate Affairs, Government of India.
The proposed law also advocates appointing region collector as lease authority and heavy penalty on occupants for overstaying. As per the proposal, tenant overstaying should pay the lease for two times and four times from that point. The security deposit to be paid by the tenant in advance will be a limit of two months' lease.

The Union Housing and Urban Affairs Ministry has put the draft of 'The Model Tenancy Act, 2019' out in the open for some consultation. It expresses that both landlord and tenant should present a copy of lease consent to the district rent authority which will also have the authority to revise or fix lease following a request either via landlord or tenant.
States, which will be allowed to embrace the law owning to land being state subject, will be required to comprise lease courts and lease council and If the landlord will not complete the required fixes, the tenant can get the work done and deduct the equivalent from periodic lease.

It additionally expressed that a landlord can't enter the leased premises without 24-hour earlier notice to complete fixes or replacement. "The Rent Authority may coordinate for remuneration on the person responsible for cutting off or withholding the basic supply”. As per the proposed law, a landlord can't cut power and water supply in the case of a dispute with the tenant.
"The lease Authority may exact a penalty be paid to the landlord or tenant if it finds that the application was made pointlessly or vexatiously”.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.