Here is the Senior High Court Advocate Rajini's legal advice on Supreme Court new rules for the Rental Agreement and Model Tenancy Act 2021.
#LawyerRajini #RentalAgreement
A new Model Tenancy Act has been approved by the Union cabinet on Wednesday, June 2, 2021. The main trigger for this is the 1.1 crore vacant houses that were found to be locked and empty in the 2011 census. Chances are that this number must have risen in the past 10 years. This model law now has to be accepted and adopted by all the states and Union territories which will notify the law according to their state’s requirements.
The new tenancy law is a model Act created by the Union and each state and Union territory has to enact its own version. It mandates that all tenancy agreements will be registered with the authority with a unique registration identity. The registration agreements would be uploaded on the website of the Rent Authority with such documents as it deems fit.
There will be special tenancy and adjudicating authorities at the district level and Rent Courts as well. This may shorten the period of dispute. In fact, in the case of overstay, the tenant has to pay twice the rent for two months and then four times the rent for upto 6 months. This can be enforced by the Rent Authority.
Prospective law: The law is prospective and will address future problems. There is specific reference to property managers who can work on behalf of the landlords and tenants. This is an interesting feature which has the potential to create a layer of services to both the landlord and the tenant. It is beyond the property brokerage services, as is prevalent today.
The Rent Agreement will be signed in duplicate and landlord and tenant will retain an original copy each. Landlords are to provide receipts for rent and other payments. In the case of electronic transfers, bank slips will suffice.
The period of tenancy is left for agreement between the tenant and landlord. Renewal has to be within the period of tenancy. There is a three-month notice period for both tenant and landlord. Subletting is allowed only with a supplementary agreement. The rent enhancement has to be on the grounds of tenancy contract. The landlord can ask for enhanced rent for alteration, repairs or enhancement from tenants who lived before the start of the work, on mutually agreed terms.
The advance rent that a tenant has to pay the landlord has been capped at two months for residential and six months for commercial premises. This is to be paid back to the tenant after deductions for tenant liabilities.
If the landlord refuses to accept the rent during a dispute, the tenant can send it by money order for two months, after which it can be deposited with the Rent Authority. If the tenant is unclear whom to pay the rent to, it can be deposited with the Rent Authority to determine whom to pay it to. Withdrawal of an amount equivalent to the agreed rent does not become an admission against the landlord, no matter what claims are made by the tenant.
Maintenance: Responsibility of maintenance of the property in the same condition as at the start of the tenancy lies with both the landlord and tenant. Repair and maintenance of common areas should be documented in the tenancy agreement. The management and maintenance of the premises during tenancy is the tenant’s responsibility. If the tenant fails to undertake agreed repairs, the landlord can do the repairs out of the deposit amount. The tenant has to pay it back within a month of the notice issued by the landlord.
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