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The Union Cabinet approved the Model Tenancy Act (MTA) on June
02, 2021. The headline feature of this Act is setting up of
separate rent authorities, courts, and tribunals at district level
for protecting the interest of both the Tenant and the Landlord.
MTA will have a prospective effect and both the States as well as
Union Territories can adopt the law either by enacting fresh
legislation or by amending the existing laws already
MTA seeks to cover both urban and rural areas and will apply to
premises let out for residential, commercial, or educational use
but not for industrial use. The primary requirement under the MTA
is that written agreement is a must for all new tenancies which
would be governed by the MTA and the said agreement has to be
submitted to the concerned District Rent Authority. MTA does not
provide for a fixed duration and the amount of rent as these need
to be decided by the Tenant and the Landlord mutually through
Key provisions of the MTA
- Landlord: A person who receives or is entitled
to receive, the rent of any premises, on his own account, if the
premises were let to a tenant. It includes his
successor-in-interest as well as a trustee or guardian or receiver
who is receiving rent for any premises or is entitled to so
receive, on account of or on behalf of or for the benefit of, any
other person such as minor or person of unsound mind who cannot
enter into a contract.
- Tenant: A person by whom or on whose account
or on behalf of whom, the rent of any premises is payable to the
Landlord under a Tenancy Agreement. This includes any person
occupying the premises as a sub-tenant as well as any person
continuing in possession after the termination of his tenancy.
- A time-bound and robust grievance redressal mechanism
comprising of the Rent Authority, the Rent Court, and the Rent
Tribunal has been introduced to provide fast-track resolution.
- The Rent Court and the Rent Tribunal have to dispose of a case
within 60 days from the date of its registration as provided under
Section 30 of MTA.
- The Tenant has to continue paying the rent even if there is an
ongoing dispute between him/her and the Landlord. MTA bars the
jurisdiction of Civil Courts in the case of any conflict between
the Tenant and the Landlord.
- Landlord cannot evict the Tenant during the ongoing tenancy
period as per the written agreement, except in situations as
mentioned under respective provisions of the Act.
- In case where the Tenancy Agreement had already expired but the
Tenant still continues to occupy the said rented premises, the
Tenancy would be deemed to be renewed on month-to- month basis as
per the terms and conditions of the expired Tenancy Agreement for a
maximum period of six months.
- If Tenant continues to occupy the premises even after
completion of six months from expiry of Tenancy Agreement, then the
Tenant shall be a 'Tenant in Default' and he/she would be
liable to pay an amount which is double the amount of monthly rent
for two months as a compensation.
- If the Tenant in Default does not vacate the premises even
after this six month period, an amount equivalent to four times the
monthly rent has to be paid as compensation.
|Revision of Rent
- The rent has to be revised as per the terms set out in the
Tenancy Agreement between the Landlord and the Tenant.
- If the terms of revision of rent are not set out in the Tenancy
Agreement, then the Landlord shall give a notice in writing three
months before the revised rent becomes due.
- If the Tenant who has already been informed about the revision
in rent through a notice as mentioned above does not give notice of
termination of tenancy to the Landlord and continues to occupy the
said premises, then the Tenant should be deemed to have accepted
the revised rent for the purpose of Tenancy Agreement.
|Force Majeure Clause
- In case of a Force Majeure event, the Landlord shall allow the
Tenant to continue in possession till a period of one month from
the date of cessation of such disastrous event on the terms of the
existing Tenancy Agreement.
- The Landlord cannot enter the rented premises suddenly at any
hour without prior intimation to the Tenant. If the Landlord wants
to enter the premises, then the Landlord needs to give a written
notice or notice through electronic mode, which should be served at
least 24 hours prior to the time of entry.
- The entry by the Landlord to the rented premises can be only
for the following events:
- To carry out any kind of repairs or replacement work
- To carry out the inspection of the rented premises for the
purpose of determining the habitable state of the premises
- For any other reasonable purpose as may be defined in the
- The tenants who would have entered into the tenancy agreements
in the current year i.e., 2021, as per the existing tenancy laws
would be exempted from the purview of the Model Tenancy Act,
- There is no requirement of a separate law as all the conditions
which needs to be fulfilled in order to validate a Leave &
License agreement are already covered under the MTA.
- MTA does not apply on the following:
- Premises owned or promoted by the Central Government, State
Governments, Union Territory Administrations, Local Authority,
Government undertaking or enterprise, Statutory Body or Cantonment
- Premises owned by a company, university or organization given
on rent to its employees as part of service contract
- Premises owned by religious or charitable institutions as may
be specified by notification by the State Government/Union
- Premises owned by Board of Auqaf West Bengal registered under
the Waqf Act, 1995 or by any trust registered under the public
trust law of the State/Union Territory for the time being in
- Other buildings or category of buildings specifically exempted
in public interest by notification by the State Government/Union
- If the Landlord and the Tenant agree that the Tenancy Agreement
entered into between them should be regulated as per the provisions
of the MTA, then the Landlord has the duty to inform the Rent
Authority which is to be set up for the submission of the Tenancy
Agreement, post which MTA would be applicable on the said Tenancy
Unless otherwise agreed upon by the Landlord and the Tenant in
writing, the Landlord as per the MTA will be liable for:
- Structural repairs, except those damages which are caused by
- Colouring of the walls or whitewashing
- Maintenance of the doors and windows as well as their
- Changing of the pipelines, whenever necessary
- Electrical wiring maintenance from time to time
- Cleaning of the drains regularly
- Any kind of fixtures or repairs in kitchen
- Socket repairs
- Maintenance of the garden or open spaces
- If there is any kind of damage, then the Landlord should be
informed as soon as possible
- Any kind of replacement needed for the glass panels in doors or
- The Landlord cannot withhold any essential supply to his/her
premises given on rent to a Tenant
- Amount of deposit to be charged by Landlord has been fixed
under the MTA
- Residential: Cannot be more than two month
- Commercial: Cannot be more than six month rent
- No intentional damage must be done to the premises
MTA is clearly an enabling step taken by Government and will
bring about heightened professionalism in governance of real estate
assets. Key attributes such as faster and transparent decision
making will benefit the stakeholders and create better transaction
The existing rent control laws have proven to be restrictive and
have had an adverse impact on the growth of rental housing.
Different Rent Acts typically lean towards the Tenant and are seen
to discourage owners from renting out their vacant homes due to
fear of the Tenant not vacating the premises and claiming
protection under relevant Rent Act. It is expected that a clear and
stable legal framework for tenancies will help unlock the
significant housing inventory in India and open the doors for
private players to participate in rental housing sector.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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