Cabinet clears Model Tenancy Act to encourage renting out vacant properties

Act proposes rent & duration of tenancy will be fixed by mutual consent between owner, tenant through written agreement. Model law, though, is not binding on states.

After being on the drawing board for over five years, the Union Cabinet Wednesday approved the Model Tenancy Act that will protect the interest of both tenants as well as landlords. The Act proposes that the rent and duration of tenancy will be fixed by mutual consent between the owner and tenant through a written agreement. According to officials in the housing ministry, which is piloting the model Act, there is no monetary ceiling under the law, which enables parties to negotiate and execute the agreement on mutually agreed terms. “It will give confidence to landlords to let out their vacant premises,” the officials said.

The revision of rent between the landlord and the tenant will be in accordance with the terms of the tenancy agreement. Before revising a rent, landlords will have to give a written notice three months in advance.To safeguard the interest of the landlord, the model law has provisions to deter tenants to overstay after the expiry of their tenancy.If a tenant does not vacate the premises after the tenancy expires, the landlord will be entitled to compensation, which will be double the monthly rent for two months and four times the monthly rent after that.

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