What the Draft Model Tenancy Act (2021) Says About Eviction

Rental Housing Jul 15, 2021

The Central government on 2nd June, 2021, released the Draft Model Tenancy Act (2021) (‘the MTA’) , to institutionalise rental housing in India. The MTA, if adopted by state governments in India, will result in the repeal of the prevailing rent control legislations.

Significance of the new MTA

The MTA of 2021 proposes a three-tier ​​quasi-judicial mechanism to govern tenancy agreements in residential and commercial premises. It also seeks to overhaul the tenancy-related dispute resolution mechanism by instituting district-level Rent Authorities and Rent Courts along with state-level Rent Tribunals. Furthermore, the MTA  moves away from the practice of imposing a ceiling on rent, and allows landlords to charge the rent based on the market value of the property.

Eviction under the MTA

Under the prevailing rent control regime very few landlords have successfully proved in court that they need the premises for their own use, enabling them to evict tenants enjoying rent control. As things stand, a large number of renters continue to occupy their rented premises since the time they were built. [1]

The MTA outlines the conditions under which landlords are allowed to evict tenants in case of non-compliance. According to the Act, the landlord (or the property manager) is allowed to evict the tenant if-

  • He refuses to pay the rent
  • He fails to pay the rent for more than two months
  • He occupies the premises or a part of the premises without the permission from the landlord
  • He misuses the rented property even after being served a written notice

It empowers the Rent Authority, which is to be the registering authority of all tenancy and sub-tenancy agreements in residential and commercial premises, to enforce the eviction of tenants if they fail to comply with the provisions of the Act. Rent Courts and Rent Tribunals (the appellate authorities)  may also enforce the eviction of non-complying tenants.

While many regard the new MTA to be a much-needed reform to do away with a system which caps rents at rates well below the inflation rates and makes eviction difficult, enacting it may also prove to be controversial. For instance, news articles report that the MTA may run into opposition in Mumbai where several properties come rent control, since some political parties are claiming that the MTA is anti-tenant. [2]


[1] Marron Institute (2014)- Decline of Rental Housing in India: A Case Study of Mumbai

[2] midday.com (June, 2021)- Maharashtra to face challenges if it introduces Model Tenancy Act: Real estate experts


At TEAL, we are building the next generation of property due diligence using big data analytics and machine learning. We provide reliable information about property ownership, registration status, disputes, tax compliance history and all other information that you will need to make a safe and secure property investment. To learn how TEAL can help you in your journey, visit tealindia.in.

Tags

Great! You've successfully subscribed.
Great! Next, complete checkout for full access.
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.