2 years and many reminders later, just 4 states adopt tenancy law

Tamil Nadu and Andhra Pradesh had enacted their laws before the final MTA was approved – in 2017 and 2018 respectively – as the Ministry had suggested repealing old rent control acts and enacting new tenancy laws when it launched the ‘Housing for All’ mission in 2015. Assam and Uttar Pradesh enacted their laws in 2021 after the Model Act was approved.

A senior UP government official said the state had set up rent courts (an officer of additional district magistrate rank) in all 75 districts, one of the provisions of the Uttar Pradesh Regulation of Urban Premises Tenancy Act, 2021. While the Model Act states that no property can be leased without informing the rent authority in writing, the UP Act makes it mandatory for leases of over 12 months. The official said since most leases are of 11 months, the state has so far received 206 applications for registering leases. An official of the Assam government said the process of getting the rules framed under the Act was on and the registration of leases would only start after that.

Anshuman Magazine, the chairman and CEO for India, South-East Asia, Middle East and Africa at real estate consultancy firm CBRE, said the rental housing market was expected to flourish in the coming years due to rapid urbanisation, relocation to workplaces and the rising costs of home ownership. He said the MTA was expected to streamline the segment by providing a legal framework. “Apart from the four states, the pace of adoption of the Act remains slow among others. The government’s push to encourage states for a faster adoption of the MTA is critical to streamline this sector,” he said.

The Model Tenancy Act mandates that properties should be rented after signing a rental agreement that includes the period of tenancy, the agreed-upon rent increase and fixed security deposit (up to two months’ rent for residential and six months’ rent for non-residential premises). These agreements are to be submitted to the rent authorities (officers of deputy collector rank) for approval. The Act sets up rent courts, an officer of ADM rank appointed by the district magistrate, and rent tribunals, a district judge or additional district judge appointed by the state government in consultation with the high court, for disputes. In case of a dispute, the rent court can decide the revision of rent, eviction, application for taking possession of a premises etc. The order can be challenged before the rent tribunal.