Landlord tenant problems in India need no more fear squatting tenants and those living in rented accommodation shouldn’t be constantly afraid of untimely eviction as interests of both parties is going to be safeguarded in a bold tenancy law drafted through the Union government.
The housing and urban poverty reduction ministry has readied the draft from the Model Tenancy Bill, 2015, doing aside with some archaic rules that control this sector. The draft will soon navigate to the cabinet for its approval.
It proposes a completely independent authority for registration of all tenancy agreements along with a separate court for resolving disputes, an issue in a country where thousands associated with rent-related litigations are pending in legal courts.
Realty experts said the move might encourage rental housing, a key element of the NDA government’s flagship scheme — housing for those by 2022 — likely to show up for cabinet approval on Wednesday.
“This will unlock a lot of rental stock into the market as more home owners will be encouraged to rent homes. Currently, not many property owners rent away properties and primarily fall back on property appreciation since the rental yield is very low (about 1-2%) and there’s always the fear of the tenant not moving out following the lease has expired, ” said Anshuman Journal, chairman and MD of CBRE Southern Asia Pvt Ltd.
The proposed legislation has been provided the “model” tag to let states have the choice of adapting or rejecting it because land is really a state subject.
“Currently, almost all states have their very own rent laws. But many of them have grown to be archaic and failed to serve their own purpose. The opaqueness has not only created renting out properties a tricky extramarital relationship for landlords but taking a house on rent has turned into a nightmarish experience too. Many tenants tend to be forced to cough up arbitrary lease hikes or face eviction, ” said the official.
Legal experts welcomed the draft law, too. “This is a good legislation that seeks to set up a special court to address Possession Dispute in India cases. The present statutes do not provide any protection to the landlord in terms of compensation if the tenant does not vacate the premises in time,” said Sunil Tyagi, senior partner, ZEUS Law, a corporate-commercial law firm.
The law will allow landlords to charge rents — to be decided by respective state governments — on a par with market rates. States would also have the power to put a cap on rent rates to check arbitrary hikes.
The move will bring relief to landlords of old properties in many cities, including Delhi, saddled with tenants who have been paying rents fixed over six decades ago.
There are safeguards for tenants as well. They won’t have to live in the fear of getting evicted at the whims of the landlord.
“All tenancies entered into after the commencement of the act shall be for a period as agreed between the landlord and the tenant and as specified in the tenancy agreement,” the draft law states.
It says that no one can let out or take on rent a property without entering into a written agreement, registered with the rent authority. Besides, all disputes will be heard at rent courts that states will have to set up. Civil courts will no longer hear such cases, as is the case now.
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