Indian Union Cabinet approves Model Rent Act

Union Cabinet approves draft Model Rent Bill for homes & commercial buildings. The bill will now be introduced in Parliament, including the proposals of the states. The main provision of the bill is that the authority will be constituted to regulate rent and to protect the interests of the building owner and tenant.

All States and Union Territories should appoint an independent authority for the registration of lease agreements. The new bill provides for the establishment of special courts to resolve disputes between landlord and tenant.

Disputes between the landlord and the tenant can be approached by the authority. The new law stipulates that only two months' rent can be purchased as a security deposit. When renting a building for commercial purposes, a maximum of six months' rent can only be purchased in advance. Central government sources said the new law would encourage more houses to be rented out.

All States and Union Territories should appoint an independent authority for the registration of lease agreements. Special courts should also be set up to resolve disputes between the landlord and the tenant. The law also applies to areas where residential, educational and commercial use is permitted. The law does not apply to industrial purposes.

The law stipulates that the landlord cannot enter the rented premises without giving 24 hours notice. The landlord has no right to disconnect the electricity and water even if there is a dispute with the tenant. The new bill authorises the landlord to pay double rent for two months if the tenant is still unable to move out of the land after the end of the contract. After that you can charge four times the rent.

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