- GS 1: Urbanization, their problems and their remedies.
- Recently, Assam has become the first Indian state to adopt and implement the Model Tenancy Act.
- The Act is aimed at establishing a rent authority to regulate market-driven renting of premises while protecting the interests of both the landlord and the tenant.
- The Act proposes a three-tier quasi-judicial mechanism to govern tenancy agreements in residential and commercial premises and undertake dispute resolution by instituting district-level Rent Authorities and Rent Courts along with state-level Rent Tribunals
- The Act also moves away from the mechanism of imposing a ceiling on rent, and allows landlords to charge the rent based on the market value of the property.
- The adoption of the new Act, by dismantling rent control, has the potential to rationalize the rental housing sector.
- Establishment of a separate mechanism for the efficient redressal of disputes will generate confidence among home-owners.
- The new Act can also benefit tenants in cases where landlords often ask for a large security deposit.
About the Model tenancy Act approved by the Union Cabinet
- The Model Act requires the landlord and tenant to sign a written agreement which specifies the rent, period of tenancy and other related terms. Security deposit is capped at two months’ rent for residential premises, and six months’ rent for non-residential premises.
- Conditions for eviction of tenant under the Model Act include
- Refusal to pay agreed upon rent
- Failure to pay rent for more than two months
- Occupation of part or whole of premises without written consent
- Misuse of premises despite a written notice.
- The Model Act establishes a three-tier quasi-judicial dispute adjudication mechanism consisting of
- Rent Authority
- Rent Court and
- Rent Tribunal.
- No civil court will have jurisdiction over matters pertaining to provisions under the Model Act.
- Rent Authorities and Rent Courts may be established by the District Collector with the approval of the state government. The state or union territory government may establish a Rent Tribunal after consulting with the jurisdictional High Court.