Draft Tenancy Act 2015 deciphered

There is a Draft Model Tenancy Act in the works that replaces the archaic Rent Control Act. This is called a Draft as Land is a subject of the states, and hence it is left to the states to accept this "draft". 

The objective of this Act is to make tenancy laws more transparent, so owners are more comfortable with letting out their premises, without worrying about a tenant who will not vacate. 

Below are the salient features of this Act: 
1. Whereas the Rent Control Act was only relevant to agreements with a tenancy period of at least 12 months, this Act is applicable on tenancy agreements of shorter duration as well. Hence, there is now no longer an advantage to sign "11 month" agreements.   

2. All tenancy agreements (including ones already executed and currently in effect) must be informed to the newly appointed Rent Authority in the respective area, in a specified format. 
3.  If the tenancy agreement is not renewed before the termination date, then it will be auto-renewed at the same terms and conditions, for a maximum of 6 months only. 

4. On renewal, the rent will be revised as per the escalation mentioned in the Tenant agreement. If the landlord wishes to revise the rent at a higher rate, then the same must be informed to the tenant at least 3 months before termination. 

5. If the tenant does not serve notice before termination on receipt of an intimation by the landlord or property manager about the escalated rent, then it is assumed that he has accepted the same. 

6. The security deposit shall not exceed more than 3 months, unless specifically called out in the agreement. It shall be refunded to the tenant within one month of hand over of the vacant premises. 

7. The roles and responsibilities of a "Property Manager" have been defined. 

8. In case the tenant fails to vacate, and the landlord wishes to possess the promises for his own use, the landlord shall be entitled to obtain possession thereof within one month in case of residential premises and two months in case of non-residential premises. 

These are just a few of the important highlights. You can find the complete Act here: 
http://mhupa.gov.in/W_new/Draft_Model_Tenancy_Act_2015.pdf

We will also discuss the implications of some of these clauses. Watch this space for more! 

---