Mega boost to real estate sector: Govt to soon come out with Model Tenancy Law2 min read . Updated: 25 Nov 2020, 06:58 PM IST
- The ministry had in July 2019 floated the draft Model Tenancy Law
- Model Tenancy law is ready. It has been translated into various languages as it has far reaching implications, the official said
To boost real estate sector especially rental homes, the government will soon come out with the Model Tenancy Law, said housing and urban affairs secretary Durga Shanker Mishra on Wednesday. The ministry had in July 2019 floated the draft Model Tenancy Law. "Model Tenancy law is ready. It has been translated into various languages as it has far reaching implications," Mishra said.
The deadline for feedback on the proposed model tenancy law ended on 31 October and now States have been asked to send those feedbacks after compiling it, he said. Mishra was addressing a webinar organised by realtors body NAREDCO.
Mishra pointed out that 1.1 crore homes were vacant as per 2011 census as people fear to give their homes on rent. The model tenancy law will eliminate anomalies and give a boost to real estate sector, he said.
The Centre will send the Model Tenancy Law, after approval from the Union Cabinet, to states for its adoption. The draft model tenancy law proposes that landowners will have to give a notice in writing three months before revising rent. It advocated appointing a district collector as rent authority and heavy penalty on tenants for overstaying.
"The Model Tenancy Act aims to bridge the trust deficit between tenants and landlords by clearly delineating the obligations of tenants and landlords. To ensure speedy redressal of disputes, it proposes to establish Rent Court and Rent Tribunal to hear appeals for matters connected to rental housing. Ultimately, the creation of a rental housing stock will help students, working professionals and the migrant population, at large, to find accommodation," said Anuj Puri, Chairman - ANAROCK Property Consultants.
“Provisions announced in the Model Tenancy Act would make renting a viable option for tenants as well as property owners, if states show the willingness to adopt it in letter and spirit," said Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and PropTiger.com.
Commenting on the draft law, Ankit Kansal, co-founder and managing directo, 360 Realtors said, "We expect rental housing to pick up the pace once the Model Tenancy Law comes into effect. The government has to ensure that the states should not face hurdles to implement it as was witnessed during the implementation of RERA. As per the reports, the law has taken care of every aspect related to the tenants and landlords."
"Investment in properties will also increase as people will now look at the return on investment as an assured tool of financial security," Kansal added.