Central govt set to approve model tenancy law

The government will approve the model tenancy law in the next one month and then send it to states/UTs for adoption, a reform aimed at boosting rental housing, Housing and Urban Affairs Secretary Durga Shanker Mishra said on Wednesday.

Addressing a Assocham webinar on the housing sector, he said the Centre would encourage states/Union Territories to adopt this model law. He hoped that they would pass necessary legislations over the next one year.

"We are bringing a very big reform. We are changing the tenancy law," Mishra said.

The secretary pointed that the present tenancy laws in various states were skewed towards safeguarding the interest of tenants.

As per the 2011 census, Mishra said, 1.1 crore homes were vacant as people fear giving them on rent.

The secretary said the model tenancy law will be approved in a month by the competent authority.

Mishra said his ministry would ensure that within one year every state passes legislation to implement this model law.

The secretary said the model law provides for rent transactions on agreements and dispute resolution system.

"We hope that 60-80% of the vacant flats will come into rental market once this law is implemented," he said, adding that the real estate developers could also convert their unsold inventories into rental housing.

The ministry had in July 2019 floated the draft model tenancy law, which proposes that landowners will have to give a notice in writing three months before revising rent. It advocated appointing a district collector as rent authority and heavy penalty on tenants for overstaying.

Talking about the newly launched Affordable Rental Housing Complexes (ARHC) scheme, Mishra said the programme aims to convert lakhs of vacant flats owned by the Centre and states into rental housing for migrant workers at a very cheap rent.

The government had announced the ARHC scheme as part of the over Rs 20-lakh crore economic package.