In India, there are many laws and regulations which govern the relation between landowners and tenants. In spite of several laws, there have always been many differences and disputes between landowners and tenants. Thus, codified legislation for those disputes is a need of today for the growth of the nation. With the motive to ease the relations between the landowners and the tenants the Centre Govt. proposed the Model Tenancy Act 2019 to encourage transparency and efficiency among tenants and the landowners.
The Act is not yet passed by the Parliament. The Govt. expresses its wish to repeal the existing rental laws in India by bringing the new Act. The draft of the Act is currently under the review by the States and Union Territories.
Some features of this proposed law are specified below:-
What is the Purpose to enact the Act?
The Government has committed to provide housing for all by the end of 2022. Therefore, the Act is proposed to establish the Rent Authority for regulating renting premises in an efficient and transparent manner, to balance the interests of landowner and tenant by establishing Rent Court and Rent Tribunal for speedy dispute redressal.
Applicability of the Model Tenancy Act-
The provisions of the Act are not applicable to:
- The premises owned or promoted by the Central or State or Union Territory Government or Local Authority or a Government Undertaking or Enterprise or a statutory body or cantonment board.
- The premises owned by a company, university or organization given on rent to its employees as part of service contract.
- Any premises owned by religious or charitable institutions as may be specified.
- Any premises owned by any trust registered under the Public Trust Act of the State.
- Any premises owned by Wakfs registered under the Wakf Act, 1995.
- Any other building or category of building specifically exempted in public interest through notification.
However, if any of the above mentioned premises owner wishes that tenancy agreement entered into by them be regulated under the provisions of this Act, the owner may inform the Rent Authority to do so under Section 4 of this Act.
What does the term “Tenant” means?
“Tenant” is a person on whose account or on behalf of whom the rent of any premises is or but for a contract express or implied, would be payable for any premises. It also includes person who occupies the premises as a sub tenant and also person continuing in possession after the termination of his tenancy whether before or after the commencement of this Act. However, it does not include any person against whom any order or decree for eviction has been made.
What is a Tenancy Agreement?
Tenancy Agreement means a written agreement describing all the terms and conditions of the tenancy. The agreement must be stamped and registered. In case of any changes or alteration, it must be put in writing. The Agreement must be dated and signed by the landowner and the tenant.
Period of Tenancy-
- The Period of tenancy is as agreed between the Landowner and Tenant in the tenancy agreement.
- The tenant can approach the landowner for renewal or extension of the tenancy within the period agreed between them in the tenancy agreement. However, renewal must be done prior to the end of the tenancy period.
- In case of period of tenancy fixed term ends and has not been renewed and the premises have not been vacated by the tenant then the tenancy can be deemed to be renewed on a month to month basis on the same terms and conditions as discussed in the previous agreement for a maximum period of six months.
What are the Rights of a Tenant?
- Right to privacy- Earlier landowners used to enter the premises of the tenant as and when they want to. Therefore, this Act applied a provision for the privacy of the tenant. Now a landowner or the property manager has to give a notice at least 24 hours before the time of the entry either in written or through electronic medium to the tenant. The notice should specify the reason for the visit and the day and time of the entry between 7 AM to 8PM.
- Right against unfair eviction- A landowner cannot evict the tenant without sufficient reason or cause. The rules of eviction vary as per the state law.
- Right of fair rent- The landowner cannot charge extraordinary amounts in rent. The valuation of property for rent is to be dependent on the value of the property. If the amount asked for rest is too much as compared to the value of the property then the tenant may approach to the court to seek redressal.
- Right to get original signed copy of the agreement-The tenant has the right to get one original signed copy of agreement from the landowner within fifteen days of the agreement.
- Right to essential services- It is the basic right of the tenant to enjoy essential services such as water supply, electricity, gas pipeline, etc. A landowner does not have the right to withdraw these services even if the tenant has failed to pay rent with regards to the same property or different one.
- Right to recover security deposit- Now, tenants have to pay maximum two month rent as security deposit. As in cities like Bangalore & Mumbai, tenants have to pay at least one year rent as security deposit. Also the landowners are obligates to refund the security deposit to tenant at the time of taking over vacant possession of the premises. However, landowners can deduct any liability of the tenant from the security deposit.
What are the rights of a Landowner?
- The Landowner has the right to evict the tenant on a personal or bonafide requirement.
- The Landowner has the right to temporarily recover the possession of the premises.
- The Landowner has the right raise the rent periodically as per the rules.
- The Landowner has the right to be informed about the damage and if any repair or maintenance being made to the premises or the property.
- The Tenant cannot sub-let the whole or part of the rented premises without prior permission of the landowner.
- The Landowner has the right which can be enforced against the tenant who stand as defaulters in the payment of rent or misuses the premises of the landowner.
Revision of Rent-
The rent should be as per the terms set out in the Tenancy Agreement. However, the landowner can increase the rent with a prior notice of three months in writing to the tenant before the increased rent becomes due. In case tenant fails to give the notice of termination of tenancy to landowner then the tenant have to accept whatever rent increase has been proposed by the landowner.
An Appeal can be filed before Rent Court having territorial jurisdiction against the order of the Rent Authority made under this Act. The Appeal must be filed within 30 days from the date of the order made by the Rent Authority.
Associate at Aggarwals & Associates, S.A.S. Nagar, Mohali