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Union Cabinet approves Model Tenancy Act


The Union Cabinet approved the Model Tenancy Act, a move that will help overhaul the legal framework with respect to rental housing across the country.


GS-III: Indian Economy (Growth and Development of Indian Economy)

Dimensions of the Article:

  1. What is the Model Tenancy Act?
  2. About the latest approval by the Union Cabinet

What is the Model Tenancy Act?

  • Model Tenancy Act, 2019, a tenancy law in India, was designed to rebuild tenancy market seeking to replace archaic rental laws of India and to solve housing availability deficit.
  • The Act seeks to penalize recalcitrant tenants for refusing to move out of their rental properties after the agreed-upon rental period expires. The landlord will be able to claim double of the monthly rent for two months and four times of the monthly rent after that as compensation.
  • The Act stipulates that a landlord cannot refuse to provide essential utilities and access to common facilities. This has been a fairly common grouse of tenants in the past.
  • The landlord will also not be able to increase the rent without giving at least three months’ notice to the tenant, and cannot increase rent in the middle of a rental term.
  • In order to bring transparency, fix accountability and promote fairness in the rental housing segment, the policy proposes setting up of a rent authority.
  • The Act will help in achieving the target of “Housing for All by 2022”.

About the latest approval by the Union Cabinet

  • Approved act will help in rebuilding legal framework on rental housing in India which in turn boost overall growth.
  • Act was passed with the aim of creating a vibrant, sustainable and inclusive rental housing market.
  • It will help in creating adequate rental housing stock for all income groups and address the issue of homelessness.
  • It will enable institutionalisation of rental housing by shifting it towards formal market.
  • It seeks to facilitate unlocking of vacant houses for rental housing purposes and give a fillip to private participation in rental housing as a business model. This will help in addressing huge housing shortage.

-Source: The Hindu

December 2023