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NEW TENANCY LAW…a revolution for landlord and tenant

INTRODUCTION

The Model Tenancy Law is a new law on tenancy in India, which was approved by the Union cabinet on 2nd June, 2021. This law aims to balance the interests of landowner and tenant in order to create a transparent environment for renting the premises as this mandates the landlord and tenant to sign a written agreement containing all the terms and conditions of rent including period of tenancy, provision of security deposit, restrictions on subletting and establishment of adjudicating authority for speedy disposal of dispute.

  1. What is Tenancy Agreement?

The Agreement executed between the landlord and tenant under the Act is called Tenancy Agreement.

  1. Is it now mandatory to execute Tenancy Agreement?

Yes, according to Sec. 4, it is mandatory for landlord and tenant to enter a detailed written Tenancy Agreement which shall also be intimated to the Rent Authority, within 2 months of date of the execution of agreement.

  1. What is the non-applicability of the Act?

According to Sec. 3, provisions shall not be applicable to:

  • Premises owned by Central or State Government or any other Government authority.
  • Premises given on rent by any organization to the employees.
  • Premises owned by religious or charitable institutions.
  • Premises owned by registered trust.
  1. Is there any minimum or maximum period of tenancy specified in the Act?

No, there is no minimum or maximum period of tenancy. According to Sec. 5, the period of tenancy shall be such as determined by mutual consent of the landlord and tenant in the tenancy agreement.

  1. What would be the scenario of tenancy in case of death of landlord or tenant?

According to Sec. 6, the terms of Agreement executed between landlord and tenant shall be binding upon their legal heirs in the event of death of the landlord or tenant, as the case may be. The rights and obligations of the successors shall also be same as of the deceased person.

  1. What is the time period for payment of rent?

There is no time period specified under the Act for payment of rent, rather it is left upon the landlord and tenant to decide the time period for payment of rent under the tenancy agreement. But it is worth to note that the landlord is under obligation to provide receipt or acknowledgement of payment of rent to the tenant.

  1. When the tenant is under obligation to pay rent to the Rent Authority?

According to Sec. 14, where the landlord refuses to accept the rent or refuses to give the receipt to the tenant, then the tenant may deposit the rent with the Rent Authority in such manner as may be prescribed.

  1. What is Security Deposit and its limit?

Security deposit is an amount which is to be paid by the tenant to the landlord to take the property of landlord on rent. The amount of security deposit shall not be more than rent amount of 2 (two) months in case of residential premises or rent amount of six months in case of non-residential premises, as the case may be.

  1. Whether the Security Deposit paid by the tenant is refundable?

Yes, the landlord shall refund amount of Security Deposit  to the tenant on the date of taking over vacant possession of the premises from the tenant, after making due deduction of any liability of the tenant.

  1. What is sub-letting and what are the restrictions on it?

Sub-letting is the transaction wherein a tenant gives his/her property on further rent to another tenant. According to Sec. 7, any tenant shall not sub-let the property except by entering into a supplementary agreement (additional agreement) to the existing tenancy agreement.

  1. Whether rent once agreed can be revised?

Yes, according to Sec. 9, the landlord can revise the rent in accordance with the terms of the Tenancy Agreement.

  1. What is redressal mechanism in case of dispute on revision of rent?

According to Sec. 10, in case of any dispute between landlord and tenant regarding revision of rent, the tenant or landlord may file application for redressal of such dispute to the Rent Authority. Consequently the Rent Authority will determine the revised rent and other charges payable by the tenant and also fix the date from which such revised rent becomes payable.

  1. Whether a landlord can stop the essential services of the premise occupied by tenant?

No, according to Sec. 20, landlord or property manager shall not withhold any essential supply or service in the premises occupied by the tenant. In case of withholding of the essential services by the landlord, the tenant may file an application for remedial action to the Rent Authority.

  1. Can a landowner re-possess his premises if the tenant fails to perform his duty mentioned in the agreement or in accordance with the act?

Yes, according to Sec. 21, landlord can re-possess his premises if an order of eviction and repossession of property is made by the Rent Authority on an application made to it by the landlord on any of the following ground:

  • Tenant does not pay agreed rent payable.
  • Tenant has not paid arrears of rent or charges for consecutive 2 months.
  • Tenant has parted the property without consent of landlord.
  • Tenant misused the property after desist notice from landlord.
  • Where it is necessary to vacate the property for construction, repair or maintenance.
  1. Can the landlord enter in the rented premises of tenant without notice?

No, according to Sec. 17, a prior notice either in writing or in electronic form shall be served to tenant at least 24 hours before the visit specifying the day, time and reason of visit. But, no person shall enter the premises before sun rise and after sun set.

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