Navigating Rental Challenges in Indian Real Estate: An In-Depth Look at the Model Tenancy Act 2021

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Renting property in India has undergone a significant transformation with the enactment of the Model Tenancy Act 2021. This comprehensive legislation aims to regulate tenancy relations, protect the interests of both lessors and lessees, and expedite dispute resolution. In this guide, we delve into the key aspects of this act to help you navigate the intricate landscape of tenancy laws. 

The Model Tenancy Act 2021 serves as the cornerstone for establishing rent authorities, systematically regulating premises' renting, and ensuring the protection of parties involved in tenancy agreements. Its overarching goal is to provide a swift resolution to disputes while safeguarding the rights and interests of both lessors and lessees.

Rights of Lessor and Lessee 

The act stipulates the rights of both lessors and lessees, emphasizing the importance of retaining the original tenant agreement. It mandates that both parties sign the agreement in duplicate, with each retaining a copy for transparency and legal assurance. 

Lessor's Rights 

Landlords possess the authority to remove structures and deduct payments in case tenants refuse or fail to conduct required repairs. This provision ensures that lessors can maintain the premises adequately, with the option to recover costs from the lessee's security deposit. 

Lessee's Rights 

Lessees are entitled to a duly signed receipt for payments made, with electronic payment acknowledgments serving as valid receipts. Additionally, in the event of the landlord neglecting required repairs, lessees can conduct repairs themselves and deduct the expenses from the rent payable. 

Right to Privacy 

The Model Tenancy Act indirectly establishes the lessee's right to privacy. It mandates that landlords must provide written notice, at least 24 hours in advance, before entering the premises for repairs, inspections, or any other reasonable cause outlined in the tenant agreement. 

Non-Payment of Rent: Remedies 

The act provides remedies for landlords in case lessees default on rent payments. Landlords can pursue either the recovery of possession of the property or eviction of the lessee for non-payment, ensuring legal avenues for landlords facing financial losses. 

Circumstances for Eviction 

Landlords can initiate eviction proceedings under specific circumstances, such as non-agreement to pay rent, failure to clear arrears, or non-compliance with charges outlined in the tenancy agreement. 

Remedies for Wrongful Confinement 

If a lessee wrongfully refuses to vacate the premises after the agreement expires, the Model Tenancy Act offers remedies for landlords. This includes receiving twice the monthly rent for the initial two months of breach and four times the monthly rent thereafter until the lessee vacates.

Types of Tenant Agreements 

Rent Agreement

A binding contract unifying the rights of landlords and lessees for temporary property occupancy. It includes details such as names of parties, property description, rent amount, late payment fines, security deposit, amenities usage, parking availability, and maintenance rights. 

Lease Agreement 

Typically used for rental terms exceeding 90 days, a lease agreement minimizes income fluctuations for landlords. It binds both parties for a predetermined period, ensuring stability and consistency in rental arrangements. 

Agreement for Leave & License 

Governed by the Indian Easement Act of 1882, this agreement grants license holders permission to occupy the licensor's space. Unlike leases, it facilitates easier eviction, as it offers permission rather than the right to occupy. 

Tenancy Exploitation 

Landlords may exploit tenants in various forms, including non-compliance with tenant agreement stipulations, refusal to redevelop structures, and reluctance to pay common area maintenance charges. The Model Tenancy Act 2021 addresses these issues, aiming to establish fair tenancy agreements and protect parties' rights. 

Filing Complaints: Rent Court under Model Tenancy Act 

The act establishes a three-tier quasi-judicial setup, comprising Rent Authority, Rent Court, and Rent Tribunal. The Rent Court, as per Section 33, adjudicates rent disputes. Complaints must be disposed of within 60 days, ensuring a timely resolution of tenancy issues. 

Settling Tenancy Disputes 

Rent Courts or Rent Tribunals set hearing dates and conduct inquiries, aiming to resolve disputes within 60 days. If unresolved, written justifications for the delay are required. Section 31 grants the Rent Authority powers similar to the Rent Court for dispute facilitation. 

Filing a Suit under Model Tenancy Act 

The Code of Civil Procedure, 1908 applies to Rent Courts and Tribunals, guided by principles of natural justice. Both landlords and tenants can file cases, following a structured application and appeal process. 

Punishments or Compensations 

Orders made by Rent Courts can include recovery of possession and compensation for damages under the tenancy agreement. Section 38 enables legal actions such as attaching bank accounts and appointing officials for order execution. 

Filing a Case Against Landlord Harassment 

Tenants facing harassment from landlords can file police complaints. Reporting harassment to the police, following a specific process, ensures legal documentation and potential recourse for tenants.

Which states have adopted the latest Model Tenancy Act? 

Only four states, Tamil Nadu, Andhra Pradesh, Uttar Pradesh, and Assam, have revised their tenancy laws on the lines of the model tenancy law circulated by the Union government in 2021 

Conclusion 

Navigating the intricacies of tenancy laws in India requires a comprehensive understanding of the Model Tenancy Act 2021. By recognizing the rights, obligations, and legal remedies available, both landlords and tenants can foster a fair and respectful tenancy environment. Awareness and adherence to the law pave the way for harmonious landlord-tenant relationships, ensuring a balanced and just renting experience.