Approval of Model Tenancy Act allows to fill up 10 mn vacant homes

Around 10 million vacant homes are set to find takers as the union cabinet has approved the Model Tenancy Act to support the interest of tenants and homeowners. The government told the media the act, which is currently open for enactment by states and union territories, will encourage homeowners who were suspicious of renting out their houses under the previous tenancy and rent control laws. Under the new act, without any written agreement renting out any property in rural or urban areas is illegal. It will help formalise the dark market of rental properties, unlock empty houses, increase rental yields, and decrease procedural obstacles in registration. Though it restricts the removal of tenants during the tenancy term, the act needs tenants to proceed to pay the rent even during the pendency of a conflict with the landlord. In circumstances of force majeure, the landlord shall permit the tenant to continue in possession for one month from the date of cessation on terms of the existing agreement. According to the estimates by the Ministry of Housing and Urban Affairs (MoHUA), currently, about 11 million houses are vacant in urban areas because the landlords are unwilling to let these properties due to the lack of security measures in the existing tenancy and rent control laws. The new act will bring sufficient security for owners that will encourage them to rent out these properties. While welcoming the act, Anuj Puri, chairman, Anarock Consultants, said it would help connect the trust among the landlords and tenants. As per him, more rental housing will assist students, working professionals, and migrant populations to find urban accommodation, especially in situations like the Covid-19 pandemic. Image Source Also read: Model Tenancy Act approved: Here’s what the industry thinks Also read: Sales of three-BHKs increased 19% in seven cities: PropEquity report