Finance Minister Nirmala Sitharaman proposed regulating the rental housing market scenario that is fraught with disputes between tenants and landlords. It paved the way for the Model Rent Act, which was announced recently. The Centre has left it to the states to either implement the Act or amend it according to specific needs. The Rent Control Act governs the leasing of properties and each state has its own version. In India, the first rent law was passed in 1915 during the Bombay Presidency, and then in 1939. This was later replaced by the Bombay Rents, Hotel, and Lodging House Rates Control Act, 1947. By that time, thousands of buildings (popularly called as chawls) had been built in Mumbai for the wealthy people to earn rental income. However, in 1948, the state legislature passed the Bombay Rent Control Act that froze the rent prices at a ridiculously low level. As a result, earnings on rental incomes came to almost a stop. Though the Act was amended in 1971and 1999, the rents continued to remain extremely low. Though this system protected interests of individual flat owners who wanted to give their flats on rent, it has failed to boost construction of properties specially built for renting. The Maharashtra government has, however, taken the dual path – it will adopt the Act for new constructions, and introduce an amendment that will continue to give protection to properties governed by the Maharashtra Rent Control Act, 1999. By adopting it will bring relief to new constructions and their owners and tenants. The implementation of these is still not clear
FEATURES OF THE MODEL ACT
- The Act will put a cap of two months’ rent on the security deposit. If the tenant fails to vacate the premises after the agreement is over, the landlord can charge double the rent for first two months and four times thereafter. However, it will bar the landlord from cutting essential supplies like water and electricity to the tenanted premises.
- The landlord can’t increase the rent during the middle of the tenancy contract
- The tenant can’t sublet the premises without prior consent of the owner.
Special courts to be created to deal with disputes between tenants and landlords and puts the obligation of carrying out repairs and maintenance on the owner, allowing her/him to recover such expense from the security deposit.
Courtesy/By: Sharren
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22 Jul 2019
