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Model Tenancy Act 2021- Analysis

The right to shelter is a basic right guaranteed by Article 21 of the Constitution to all citizens. While upholding that the right to shelter is a basic right in the landmark case of Chameli Singh v. State of Uttar Pradesh, the court stated: "Shelter for a human being is not just protection of his life and limb. It is a place where he may grow physically, psychologically, academically, and spiritually." The right to shelter is a basic right protected by Article 19(1)(e) read with Article 21 of the Indian Constitution.

Over the last decade, India has experienced a massive surge in urbanisation, causing people to migrate from rural to urban regions in quest of a better living. Over the last decade, India has seen a tremendous increase in urbanisation, causing people to migrate from rural to urban areas in search of better life opportunities, resulting in overcrowding in cities that were not yet prepared to meet the housing needs of such a large population, leading to the creation of roadside housing and slums.

Currently, the Rent Control Acts of different states control renting regulations in India. However, these acts have several loopholes that discourage people from engaging in the rental real estate sector. According to the current Rent Control Acts, the amount of rent that landlords can charge must be a proportion of the amount they spent on the building's development. This creates a gap between the market rate and the rent established by the legislation. Furthermore, the statute makes it difficult for landlords to remove their tenants, which hinders the selling of a tenanted property.

The current rental regulations also deter renters from moving into a leased property since there is no maximum limit on the security deposit that landlords can want. Furthermore, there is no provision requiring landlords to provide renters with a receipt for rent payment, putting residents at risk of eviction on the false accusation of non-payment of rent. These are some of the primary factors that deter both landlords and renters from engaging in the rental housing sector. The Union Cabinet adopted the Model Tenancy Act, which aims to address India's housing deficit by establishing a sustainable and thriving rental housing system. The draught for the same was introduced in 2019. This act intends to formalise our country's rental housing industry and therefore eliminate the informal arrangement. The legislation, if implemented by the states into their legislative processes, will replace the outdated and antiquated rental regulations that operate as a significant impediment to unlocking properties in India.

Some of the Key Features of the Legislation:

Houses are offered for rent under the current informal system based on informal oral agreements, which in many cases subsequently become a source of conflict between the individuals concerned. This legislation requires the establishment of a district Rent Authority, to which the parties must present a documented tenancy agreement detailing the rent amount and the term for which the property has been rented.

Another significant issue addressed by the legislation is landlords' sudden increase in rent. One of the primary causes for the open antagonism between landlords and renters is that rent is determined by the landlord's whims and fancies under the informal house renting system. This statute requires a minimum of three months' notice to the renter before raising the rent.

In a handful of megacities, the current rental housing system allows landlords to demand as much as a year's rent as a security deposit, resulting in nothing but tenant exploitation. This legislation addresses the situation of renters by imposing a ceiling on such deposits, which cannot exceed two months in the case of residential premises and six months in the case of commercial premises. The legislation further balances power between landlord and tenant by prohibiting landlords from discontinuing any necessary service.

Furthermore, according to Section 23 of the act, the tenant is required to evacuate the premises at the end of the tenancy and, if they do not, they will be required to pay an increased rent. The statute also prohibits the tenant from subletting the premises unless they have a supplemental agreement in place.

Several properties remain closed because the owners are afraid that if there is a problem with their renter, they will have to resort to the already overcrowded civil courts to remove them. This statute establishes a three-tiered quick justice system. The parties to such a disagreement must first contact the Rent Authority, and if they are not pleased with the order, they must next approach the Rent Court, which will have the last say in the matter. The Rent Court or Rent Tribunal, as the case may be, must dispose of the matter within 60 days.

Future Obstacles:

The Model Tenancy Act addresses all landlord-tenant problems in detail. However, because the land is a state issue under List II of the seventh schedule, this act is only a model act, and states can either accept it as is or change their existing legislation. This act's timely implementation might be difficult.

Previously, we saw how states' delays and dilution in adopting the RERA Act, which was also a central government act on state matters, posed a barrier to its appropriate and consistent execution. Furthermore, this statute has been made prospectively applicable, which implies that it will not affect existing lease agreements, which can continue with arbitrary practises such as requiring large security deposits or abrupt rent increases.

If the aforementioned concerns are handled effectively, the act will become more inclusive and beneficial to stakeholders.


According to 2011 census figures, more than one crore residences in India are empty. The Model Tenancy Act, which intends to bring openness and accountability to the rental housing industry, is a much-welcome initiative that has the potential to alleviate India's housing problem. The Model Tenancy Act successfully addresses the issue of modern rental housing concerns by attempting to create a balance between the rights and duties of both tenant and landlord.

It reduces the trust gap between tenants and landlords, therefore encouraging individuals to participate in the rental real estate sector. If properly and appropriately implemented, the legislation can assist India in meeting its goal of providing homes for everybody by 2022. Furthermore, it will contribute to the growth of our economy by encouraging individuals to engage in the rental housing industry.





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