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A significant number of people in India live in rented houses. However, due to factors like unpleasant landlord-tenant relationships, damage to properties, delay in rent payment, forceful eviction, etc., there has been constant strife between the landlords and tenants for a long time. To bring transparency to the renting process in India, the Union cabinet approved the Model Tenancy Act on June 02, 2021. If you are planning to purchase a house property, it would be helpful to know about this act.
What Is the Model Tenancy Act?
The Model Tenancy Act aims to set a three-tiered regulatory mechanism for stakeholders to govern landlord-tenant relationships. It also aims to bring the stock of vacant residential houses under the fold of formal rental housing. It also brings accountability and transparency to the existing framework of renting properties while balancing the interest of tenants and landlords.
The following are the rules under the Model Tenancy Act to be followed by tenants and landlords:
The security deposit has been fixed for residential and commercial buildings. The security deposit for the residential premises should not be more than two months’ rent and six months’ rent for non-residential property.
How Is it Beneficial?
The act will make the rental housing market more organised and bring reforms in the tenancy rules and regulations. The government expects to witness a boost in the rental-housing segment and bring transparency and trust between the tenant and landlords.
Under the act, rent authorities, rent courts and rent tribunals are introduced. It would facilitate speedy dispute resolution and reduce the burden from civil courts for tenant disputes.
The act lays down the guidelines and regulations for both the parties (landlords and tenants), clearly defining do’s and don’ts for aspects like rent and charges payable, property repair and maintenance, timings and rules for entry into premises and consequences of violation of laws and rental agreement.
To Sum Up
The real estate market has always been a lucrative investment. However, the old rent control laws restricted the growth of rental houses. The new Model Tenancy Act not only brings transparency to the rental framework but also acts as an encouragement for people to purchase and rent house properties for additional income. And why not? With online interfaces, availing home loan in India is easy and convenient. If you have ever dreamt of owning a house, this could be a chance. Apply for home loan and purchase your dream property today.
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