11/09/2015
The Draft model tenancy act, 2015 looks promising
The Draft model tenancy act, 2015 looks promising and might change the rental scenario in the country, for good. The present NDA government recently announced to move the Draft Model Tenancy Act 2015, which was earlier initiated by the erstwhile UPA government, about four years back. This move has been introduced as an improvement on this draft's obsolete predecessor, was the Rent Control Act, 1948, which had become totally outdated, in today's context. The Rent Control Act was applicable only to tenancy of more than 12 months; it had put a cap on rent and had made it extremely difficult to evict a tenant who is at fault in terms of the payments. This Act had made it difficult for the landlords who were short-changed. It is being touted that the new Act will ensure that the landlords are able to charge market rates for their residential and commercial properties.
As the Rent Control Act, 1948 has already lost its sheen; it was imperative and most appropriate to bring on a viable and a more fitting alternative to this Act. And Draft Model Tenancy Act 2015 seems to be doing just that. Talking about this new draft, Sanjay Dutt, executive managing director South Asia, Cushman & Wakefield, avers, “If this act is implemented, it will unlock a huge amount of rental stock into the market as more property owners will be encouraged to rent houses and commercial property. Currently, not many property owners rent out properties and primarily depend on capital appreciation for returns as the rental yields are very low, and come with an added risk of tenant woes.” There is absolutely no denial that a large number of tenants do not vacate the premises on the expiry of lease. Presently, as most of the laws in various states have become archaic and are not serving the purpose of the current date and age, tenants also, in most cases, have to undergo the harrowing experience of either giving in to arbitrary rent hikes or face eviction. This Act may actually help in bringing a lot of transparency as well as ease doing business for both, the landlord and the tenant. It is likely that once this Act is implemented, all states and union territories will also implement the essence of the proposal since it is beneficial for both, the landlords and the tenants.
Since land is subject of state, the new Act will not bind the states and, therefore, it is being called as a draft. Once this draft is finalised, it will remain on the states whether to introduce this or not. Although, the states may not be too quick to pick it, eventually, seeing its applicability, most states would accept it.
Ashwinder Raj Singh, CEO Residential Services, JLL India, strongly lauds the draft and terms it as something which can enable more of India's budget strong families to be able to expect to have a roof over their heads at a cost that is affordable. “This draft, if implemented, will work well for both as it will enable one to avoid arbitrary hikes. Also, landlords will not be able to evict tenants according to their whims and fancies. The new Act will safeguard the interests of both the parties in a special court of law. Therefore, there is no reason to believe that this Act will not have the required impact. A lot will depend on how the rules are executed, and if done properly, this will surely change the urban landscape of the country,” says Singh.rnrnA lot remains in the ex*****on as most laws and rules, although highly apt, fail to make a mark due to faulty ex*****on. Nonetheless, if implemented, this Act will surely bring a lot of respite for people staying in Indian cities, changing their lives, for the better. The Times Of India
