States, which will be free to adopt the law owing to land being state subject, will be required to constitute rent courts and rent tribunal. (iStock)
States, which will be free to adopt the law owing to land being state subject, will be required to constitute rent courts and rent tribunal. (iStock)

Draft tenancy law fixes rent agreement rules on rent increase, security deposit

  • The security deposit to be paid by the tenant in advance will be a maximum of two months' rent
  • Tenants overstaying will have to pay double the rent for two times and four times thereafter, according to the draft law

NEW DELHI : As announced by finance minister Nirmala Sitharaman in the Union Budget, the Centre has proposed a Model Tenancy Law to regulate renting of premises.

Sitharaman had said that current rental laws are archaic as they do not address lessor-lessee relationships fairly. Once ready, the new tenancy law will be circulated to state governments.

The Centre's proposed Model Tenancy Law mandates the landowner to give a notice in writing three months before revising rent.

The proposed law also advocates appointing district collector as rent authority and heavy penalty on tenants for overstaying.

According to it, tenants overstaying will have to pay double the rent for two times and four times thereafter.

The security deposit to be paid by the tenant in advance will be a maximum of two months' rent.

The Union Housing and Urban Affairs Ministry has put the draft of 'The Model Tenancy Act, 2019' in public for some for consultation.

It states that both landlord and tenant will have to submit a copy of rent agreement to the district Rent Authority which will also have the power to revise or fix rent following a request either by landlord or tenant.

States, which will be free to adopt the law owing to land being state subject, will be required to constitute rent courts and rent tribunal, it stated.

"In the event of tenant's refusal to carry out scheduled or agreed repairs, the landowner shall get the repairs done and deduct the amount from the security deposit," it also stated.

If the landowner refuses to carry out the required repairs, the tenant can get the work done and deduct the same from periodic rent.

It also stated that a landowner cannot enter the rented premises without 24-hour prior notice to carry out repairs or replacement.

According to the proposed law, a landowner cannot cut power and water supply in case of a dispute with the tenant.

"The Rent Authority may direct for compensation on the person responsible for cutting off or withholding the essential supply.

"The Rent Authority may levy a penalty be paid to the landowner or tenant if it finds that the application was made frivolously or vexatiously," it stated.

(Agencies)

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