Accommodation or housing was not always big a concern. With the ever increasing development and fast-paced industrialization, such problems slowly begin to take shape. A good crowd is seen to be moving towards the metropolitans lured by a fascinating lifestyle and countless opportunities. However, a promising lifestyle is still a secondary with the mandatory being the three conventional necessities of food, water and shelter.
Model Tenancy Act, 2021 or rather, rental reforms came to picture to support this enthralling crowd in a city where land is limited but population hasn’t attained that stability yet. We tend to analyze the same in a little more detail.
HIGHLIGHTS OF THE ACT
- The act necessitates that every rental agreement between two parties must be concluded in a clearly written format and the same shall be informed to the Rent Authority duly incorporated for the same. The Rental Authority is required to follow up by uploading the details of such agreement on its website in the local language of the state concerned.
- The security deposit to be paid by a tenant to his landowner is capped to the extent of not more than two months in case of a residential building and not more than six months in case of a non-residential building or part of a building.
- Sub-letting whole or part of the premise held by the tenant is not allowed unless there is a supplementary agreement made to the existing tenancy agreement.
- The act underlines the grounds for eviction of a tenant by a Rent Court viz. refusal to pay the rent agreed to, failure to pay the rent for consecutive two months, in case of parting or misuse of the premise in the absence of a written consent from the landowner or even after receiving notice to desist from the same and other activities mentioned herein.
- The act establishes a three-tier dispute redressal mechanism viz. Rent Authority, Rent Court and Rent Tribunal which shall be deemed to be a public servant in its capacity.
BENEFITS AND PITFALLS
The new Model Tenancy Act is indeed a welcoming step for both the landowners and the tenants. The act contains provisions and guidelines to promote transparency in the rental process and thus eliminate any obscurity that may lead to problems between the parties concerned. The act necessitates a written rental agreement with well-defined sections on the amount of the rent payable, the security deposit to be made in advance, the tenure of the tenancy, conditions and tenure for the renewal or extension of tenancy rights, reasonable grounds on which the landowner is allowed entry in the concerned premises, responsibility to maintain premises in the event of some required repairs or maintenance, etc.
Thus, the act tries to address the age old landlord-tenant disputes resulting from the fear of non-payment or delayed payment of rent, fear of damage to property or repossession or fear of eviction or ejection by the landlord.
However, this well-defined and detailed agreement is fraught with unnecessary provisions that may exceed the boundary of the intent of the introduced reform. Such details which ought to be at the discretion and consensus of the parties involved is now embedded into a contractual fixture, with not much scope of making or revising changes from time to time.
The next challenge comes in the face of a particular provision of the act in violation to a well- known SC judgement of 2018. The provision makes it mandatory for both the landowner and the tenant to submit their Aadhar identification number to the authority concerned in furtherance of the concluded agreement between them. This, in turn violates the SC judgment of K.S. Puttaswamy (Retd) v. Union of India, 20181 which held that Aadhar card or number is a mandatory only when a benefit or service is provided from the state to the people and not otherwise.
Moreover, the act provides that the details of such rental agreement should be made public on the website of the authority. It’s indeed true that such information and statistics on the rental property will lead to a better understanding of the real estate and thus a better framing of policies concerned. However, sharing personal information submitted by the individuals alongside the agreement will be in violation of our fundamental right to privacy.
In toto, there are various provisions in the act that ascertain a rightful balance between the interests of a landowner and a tenant. The establishment of a three-tier dispute redressal mechanism is a progressive step towards giving due attention and importance to this particular segment of society i.e. lessor and lessee. However, a careful perusal of the act leaves a room of doubt in the minds of few. The act fails to address certain important questions of affordability and availability of rental house property and concerns likewise.
With such reforms in place, one can vision the real estate market to be systemized in the coming times. However, one must note that housing comes under the State List and it is to the discretion of the states either to implement the law or otherwise. The act still just holds on paper, unsure of when it will make to reality.
ILS Law College, Pune
1Justice K.S. Puttaswamy (Retd.) & Anr. Vs. Union of India & Ors., (2017) 10 SCC 1.