Mumbai: In a serious bid to revamp rental housing in the country, the Union cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the Model Tenancy Act. The Act is expected to give an impetus to private participation in rental housing as a business model for tackling the huge housing shortage. The first draft of the Act was released by the government in 2019.
The Act will enable institutionalisation of rental housing by gradually shifting it towards the formal market. It aims at creating a vibrant, sustainable and inclusive rental housing market in the country. It will enable creation of adequate rental housing stock for all income groups.
It will further facilitate unlocking of vacant houses for rental housing purposes. It is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage.
Union Minister for Housing and Urban Affairs Hardeep Singh Puri said it will provide an overall regulatory framework for the rental housing sector. According to the minister, the Act will apply to future transactions and would be a written agreement "with terms and conditions to be determined by the landlord and the tenant."
The realty sector has termed the Act a ‘’game changer’’ as it will help bridge the trust deficit between tenants and landlords by clearly delineating their obligations and will eventually help unlock vacant houses across the country.
ANAROCK Chairman Anuj Puri said, ‘'The Act can fuel the rental housing supply pipeline by attracting more investors, and more rental housing stock will help students, working professionals and migrant populations to find urban accommodation (especially in COVID-19-like exigencies). Once implemented in all fairness across states, it will go a long way in formalising and stabilising the rental market. It would also revive the fortunes of not just the rental market but the housing sector at large.’’
Knight Frank India CMD Shishir Baijal said “The Model Tenancy Act has provisions to regulate the rights and duties of both the landlord and tenant and this shall balance the scale between both these counter parties. We believe this law is a step in the right direction and are glad to see that in just under two years since the introduction of model law, and amidst the pandemic, this will become a ground reality.”
On the other hand, Poddar Housing and Development Ltd MD Rohit Poddar opined that the Act will help in building a better tenancy market. ‘’The terms and conditions of the rental tenancy are clear to both landlords and tenants and reduce a significant number of disputes that take place due to unwritten agreements, thus the move will benefit both the landlords and tenants by creating a cohesive and sustainable environment. The approved framework will boost the overall rental housing market in India,” he said.
