Context: Centre has proposed a Model Tenancy Law to regulate renting of premises.

Highlights of the draft:

• It mandates the landowner to give a notice in writing three months before revising rent.
• It advocates appointing district collector as rent authority and heavy penalty on tenants for overstaying.
• According to it, tenants overstaying will have to pay double the rent for two times and four times thereafter.
• The security deposit to be paid by the tenant in advance will be a maximum of two months’ rent.
• Both landlord and tenant will have to submit a copy of rent agreement to the district Rent Authority which will also have the power to revise or fix rent following a request either by landlord or tenant.
• States will be free to adopt the law owing to land being state subject.
• States will be required to constitute rent courts and rent tribunal.
• If the landowner refuses to carry out the required repairs, the tenant can get the work done and deduct the same from periodic rent.
• A landowner cannot enter the rented premises without 24-hour prior notice to carry out repairs or replacement.
• Landowner cannot cut power and water supply in case of a dispute with the tenant.
• Rent Authority may direct for compensation on the person responsible for cutting off or withholding the essential supply.
• The Rent Authority may levy a penalty be paid to the landowner or tenant if it finds that the application was made frivolously or vexatiously.

Significance:

It is an important piece of legislation that promises to ease the burden on civil courts, unlock rental properties stuck in legal disputes, and prevent future tangles by balancing the interests of tenants and landlords.

Need for a law in this regard:

Young, educated job seekers migrating to large metropolises often complain of onerous tenancy conditions and obscene sums of money as security deposits that they are asked to fork out to lease accommodation. In some cities, tenants are asked to pay security deposits amounting to 11 months of rent. Also, some house owners routinely breach tenants’ right to privacy by visiting the premises unannounced for sundry repair works. Whimsical rent raises are another problem for tenants, many of whom complain of being squeezed as “captive customers“.

Besides, Tenants are often accused of “squatting” on the rented premises, or trying to grab the property.