Model Tenancy Act(MTA) to Promote Growth of Rental Housing Segment by Regulating Renting of Premises

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The Ministry of Housing and Urban Affairs has drafted a ‘Model Tenancy Act’, 2019 which envisages to balance the interest and rights of both the owner and tenant and to create an accountable and transparent ecosystem for renting the premises in disciplinedand efficient manner. It will enable creation of adequate rental housing stock for various income segmentsof society including migrants, formal and informal sector workers, professionals, students etc. and increase access to quality rented accommodation, enable gradual formalization of rental housing market.  It will help overhaul the legal framework vis-à-vis rental housing across the country. It is also expected to give a fillip to private participation in rental housing for addressing the huge housing shortage across the country.

          The Draft MTA will also promote growth of rental housing and investment in the sector and promote entrepreneurial opportunities and innovative mechanism of sharing of space.This MTA will be applicable prospectively and will not affect the existing tenancies.

          As per Census 2011, nearly 1.1 crore houses were lying vacant in the country and making these houses available on rent will complement the vision of ‘Housing for All’ by 2022. The existing rent control laws are restricting the growth of rental housing and discourage the owners from renting out their vacant houses due to fear of repossession. One of the potential measures to unlock the vacant house is to bringing transparency and accountability in the existing system of renting of premises and to balance the interests of both the property owner and tenant in a judicious manner.