Overview of Model Tenancy Act, 2021 (hereinafter referred to as “MTA”)
Kapil Malik
Legal professional with 23+ years of experience in the fields of corporate legal, compliance and litigation.
- The MTA shall be prospective and shall not impact any existing tenancies.
- States and Union territories can adopt the Model Tenancy Act by either enacting a new legislation or amend their existing rental laws.
- The MTA shall be applicable to all tenancies including ones for residential, commercial and educational use but they exclude premises for industrial purposes, hotels, lodging etc.,
- It is now mandatory for parties to present copy of the tenancy agreement to the Rent Authority with a within two months.
5. After this, a unique identification number (UIN) will be provided to the parties and the details of the tenancy agreement will be uploaded to the Rent Authority website. All information provided in the tenancy agreement will be taken as evidence of facts relating to tenancy and connected matters.
6. A cap of equivalent two months’ rent has been fixed as security deposit for residential properties and equivalent six months’ rent for non-residential properties.
7. Provision for rent increase (escalation) is to be quantified in the tenancy agreement, in absence of which any and all claims for increase in rent during the subsistence of the tenancy period will not be taken into consideration.
8. Notwithstanding, in absence of any provision for escalation in the tenancy agreement, the property owner/landowner may revise the rent by giving three months prior written notice to the tenant and where the tenant fails to give a notice for termination of the tenancy, the tenant shall be deemed to have accepted the increase in rent.
In the event of additional structural alterations or improvements (not including necessary repairs) are undertaken, the property owner/landowner may increase the rent one month after completion of such work, by an amount as agreed between the parties.
9. The MTA provides for all disputes qua revision of rent to be adjudicated by the Rent Authority. In case of refusal to accept the rent, the Tenant has the option to deposit the rent with the Rent Authority.
10. The MTA lays down definite parameters for compensation on account of failure of a Tenant to vacate the premises.
11. The landowner is entitled to compensation of double the monthly rent for two months and four times of the monthly rent thereafter, for non-vacancy of the premises by the tenant who does not vacate the premises after his/her tenancy has been terminated by order, notice or as per the agreement.
12. A Landlord is entitled to enter the premises after serving a notice to the Tenant, at least 24 hours before the time of entry. Such entry by the Landlord can be made only for carrying out repairs or replacement, carrying out inspection of the premises to ensure that the premises are in a habitable condition and/or for any other reasonable cause, stated in the Tenancy Agreement.
13. A Tenant may be evicted for non-payment of rent or non-payment of arrears and other charges for 2 (Two) consecutive months, including interest for delayed payment or if the Tenant has parted with the possession of the whole or part of the premises, without obtaining consent of the land and misused the premises, despite receipt of notice from the Landlord.
14. If the landowner refuses to accept the rent or other charges payable or give a receipt in respect thereof, the rent and other charges can be sent by postal money order consecutively for two months. Further, if the landowner does not accept the rent within this period as envisaged above, then the tenant may deposit the same with the Rent Authority.
15. No tenants are permitted to sub-let (whole or part) of the premises without prior written consent of the landowner. Such subletting or assignment, whether directly or indirectly, cannot be for a rent that is higher than the rent charged by the landowner to the tenant.
16. The landowner, tenant or property manager cannot withhold any essential supplies (being supply of water, electricity, gas, lights in passages, lifts, staircase, conservancy, parking, communication links and sanitary services etc.) in relation to the premises occupied by the tenant.
17. The tenant may give up possession of the premises after giving such notice as required under the tenancy agreement. In the absence of any such provision, the tenant shall give at least one month notice before giving up possession.
18. A grievance mechanism is proposed to be set up, which will include the Rent Authority, Rent Courts and tribunals.