The Model Tenancy Act, 2019 drafted by the Union Ministry for Housing and Urban Development, is expected to benefit both owners and tenants, thus releasing lot of housing stock for rental purpose.
The Model Tenancy Act, 2019, offers a balance between the rights and benefits, for both owners and tenants; and identifies the role of property managers.
Terms under model act
The cap on the security deposit can become a pain-point for many landlords — in cities like Bengaluru, a 10-month security deposit (with some scope for negotiation) was the accepted norm. The model act caps the security deposit amount to a maximum of two months. However, there is heavy penalty that will be imposed for non-vacancy of the residential unit.
Also, if a tenant defaults or causes significant damage to a property, a two-month security deposit may not cover the expenses the property owner incurs in repairs,” he said.
Final decision of States
The Model Tenancy Act, 2019 is a model draft proposed by centre. States can adopt the model act or may decide to frame their own laws. While the government lays down the basic policies, the exact rules will likely change within each State since land is a State subject.