New Act to regulate rental market

NEW DELHI: The housing ministry has introduced the Modal Residential Tenancy Act, 2011 with the intention of that to renew the ancient rent control legislation that restricts to rentals at some extent, and that affects to landlord in the form of meager amount for properties located in the crucial part of the metro cities.
As state government yet haven’t approved the draft legislation which proposed that once the law in place, in case of tenancies mentioned after notification, the rental will be based on the treaty of landlord and tenant.
According to this act not only the existing ones but also for those where the rent has been already fixed number of years ago, there will be no changes in the rental deed till the 24 months get completed. Only after the completion of the 22nd month proprietor can make changes in the agreement. On the other hand if there is no agreement the landlord has an option to terminate the tenancy. As state government has implemented the obligation that only that state can get facility of this act which is funding under the flagship Rajiv Awas Yojana that has a budgetary allocation of over Rs 800 crore in 2011-12 and comes with other benefits such as interest relief.
As Central government believes that the contemporary legal system has not facilitate to landlords in any form as the current rentals are very low, so they don’t have interest to reinvest in their properties. According to the reports there is lack of housing in the country approx 25 million, so government believes that if rentals are increased then landowners could take interest in realty investment. And it may help to come out of this crisis.
The government is taking inspiration from the Jawaharlal Nehru Urban Renewal Mission that got several states to repeal the Urban Land Ceiling and Regulation Act (ULCRA). Under the scheme, central assistance was contingent upon states repealing the law.
There are several other clauses to keep safe the interest of tenants. As landlord has to be given notice to tenant before increasing rentals. On the other side if revised rent is not affordable to tenant then he has to provid the termination notice.

Posted: 31 May 2011 06:08 AM PDT