What does Model Tenancy Act have in the bag for you?

INTRODUCTION Leasing of house is something very common and not only today but has been prevalent from centuries back. In simple terms, a person who leases out his residential or commercial space to other person is a landlord/owner and the person to whom the space is leased out to, is the tenant. The transfer of […]


Leasing of house is something very common and not only today but has been prevalent from centuries back. In simple terms, a person who leases out his residential or commercial space to other person is a landlord/owner and the person to whom the space is leased out to, is the tenant. The transfer of possession is something that takes place when the landlord leases out the space/property to the tenant, once the parties agree on the terms of lease, the possession is transferred from the landlord to the tenant. As of May 2021, such transfers have been governed by State tenancy laws and there had not been a central act to dictate terms of agreement between a landlord and tenant.

On 2nd June 2021, the Union Cabinet, Government of India had approved the Model Tenancy Act, 2021, whereby both the interest of owner and tenant shall be protected. The Act aims at setting up Rent Authority to look after disputes between the tenant and landlord. The aim of housing for all, is something that the act may look to achieve. Since, the act has come into force the states will have to enact a new state wise model tenancy act or they may amend their existing rental act to accommodate the new act.

The Government has been crystal clear with the objective of the act and want to take up the problem of housing shortage with providing vacant houses for rental purposes. The ambit of the act is not only towards residential purposes but also commercial sector as well. Before we go on to discuss how the new Model Tenancy Act will give its fruits to the tenants and landlords it is important to understand that the existing agreements and terms between the parties would not be hindered with the introduction of the new act.

For Owners/Landlords

The introduction of Model Tenancy Act has mandated an agreement of tenancy between the parties in writing. Period of tenancy shall be valid as per the specified period in the tenancy agreement. In a circumstance, the tenant fails to vacate the property despite the period coming to an end, they shall be liable to pay twice the monthly rent for the first two months and if they still occupy the said promises, they shall be charged with four times the monthly rent till the tenant continues.

The tenant without entering into a supplementary agreement to the tenancy agreement with the landlord cannot sub-let whole or part of the premises held by him as a tenant and neither can he/she transfer or assign his rights in the tenancy agreement. The next major factor which is often in dispute from time to time has been solved by the act, where in the Section11 (1) talks about the security deposit to be paid by the tenant in advance to the landlord. In case of residential premises security deposit shall not exceed two (2) months and in case of commercial and other non-residential premises the security deposit shall not exceed six (6) months.

In a circumstance that the tenant fails to carry out repairs on his part, the landlord may carry out the repairs and deduct the amount incurred for such repairs from the security deposit, if the cost incurred is higher than the security deposit, the tenant shall be liable to pay the excess cost within a month of issue of notice by the landlord in the same regard. Even when, the landlord refuses to carry out repairs, the tenant can carry out such repairs and deduct the expenditure

from the monthly rent, provided the deduction from rent in any one month shall not exceed fifty percent of the agreed rent for a month. The Model Tenancy Act mandates upon the tenant under Section16 to look after the premises and take reasonable care of the premises and its content, inform in writing to the landlord of any damage and to not intentionally or negligently damage the premises.

The landlord can make an application to the Rent Court for order of eviction and recovery of possession of the premises and the court may approve of the same on the grounds (Section21)- a) the tenant does not agree to pay the rent, b) that the tenant did not pay the arrears of rent and other charges payable, c) tenant has after this act being brought into force parted with the possession of whole or any part of premises without getting consent from the landlord, d) the tenant has continued to misuse the premises even after the receipt of notice from landlord of such misuse, e) whereby it is mandatory for landlord to carry out repairs/demolition/addition/alteration in respect of premises which shall not be possible without the tenant vacating the premises, f) that the landlord requires the premises to carry out repairs or alter the usage of as a consequence of change of land use by competent authority, g) in a circumstance the tenant has given notice to vacate the premises and in furtherance to that the landlord has contracted to sell the said premises or has taken further step, as a result of which his interest shall suffer if not put in possession of the premises and h) if the tenant has erected any permanent structure without the written consent of the landlord.

The last and the important point being that the tenants cannot give up the possession before giving a notice to the landlord. The tenant has to inform the landlord at least one month prior to giving up the possession.


The Model Tenancy Act provides for unforeseen events under Section 5 whereby force majeure has been included. In a circumstance of a tenant affected by any disastrous event of force majeure, the landlord shall allow the tenant to continue in possession of the premises till a period of one month from the date of cessation of such event, on the already fixed terms and conditions of the tenancy agreement entered into before.

The landlord or his property manager shall on receipt of payment of rent by the tenant duly acknowledge and provide signed receipt for the amount received to tenant, in case of payment through electronic mode, the bank acknowledgement shall be conclusive. In a circumstance where the landlord refuses to accept rent and other charges payable or refuses to give receipt, the tenant may deposit the rent with the Rent Authority. The tenants also have the provision to carry out repairs wherein the landlord refuses to carry out the repairs and deduct the expenditure from the rent to be paid in the succeeding month, the expenditure although should not exceed fifty percent of the rent amount. In case the premises has become uninhabitable, and the landlord refuses to carry out repairs after being informed about the same by the tenant, the tenant may abandon the premises after giving fifteen (15) days’ notice in writing. Section 15(6) also says that the landlord would not charge rent from tenant if due to occurrence of any force majeure event the premises has become uninhabitable, till the time it is restored by the landlord to an inhabitable state.

A landlord cannot enter into the premises after handing the possession to the tenant as and when needed, the landlord or the assigned property manager may enter the premises after serving a notice at least twenty four (24) hours before the time of entry and the notice shall specify the day, time and reason for entry. Section 17 although provides the landlord may enter after serving notice to carry out repairs or replacement or to get work done, inspect the premises or for any reasonable cause.

Under Section 20, the act mandates that neither the landlord or property manager shall withhold any essential supply or service in the premises occupied by the tenant. In case of contravention found the Rent Authority may award compensation not exceeding two months’ rent to be paid by the person responsible for withholding the essential supply and if the Authority finds the application was frivolous, it may levy a penalty of a sum not exceeding twice the monthly rent to the tenant.

Another important point for a tenant is that if a landlord fails to make any refund, he shall be liable to pay simple interest to the tenant at such rate as may be prescribed from time to time on the amount which he has omitted of failed to refund.

Apart from the various provisions created to keep in mind the interests of both the landlord and the tenants, the act has various salient features which are essential from the point of view of both the parties.


The tenancy agreement has to be informed to the Rent Authority by the landlord and tenant jointly, within a period of two months from the date of tenancy agreement, in case of failure the landlord and tenant shall separately inform the execution of tenancy agreement to the Authority within a period of one month.

Rent Authority shall provide unique identification number to the parties, upload details of the tenancy agreement on its website after receiving information about the execution of tenancy agreement.

In case of any dispute between landlord and tenant regarding revision of rent, the Rent Authority on an application made by either the landlord or tenant determine the revised rent and other charges payable by the tenant.

The terms of agreement executed between the landlord and tenant shall be binding upon their successors in the event of death of landlord or tenant.

The act focuses on establishing Rent Authority, Rent Court and Rent Tribunal to settle disputes between landlords and tenants.

The District Magistrate or Collector with the approval of State Government appoint an officer not below the rank of Deputy Collector to be Rent Authority.

Power of Rent Authority shall be same as vested in Rent Court. For Rent Court the, District Collector or Magistrate with approval of State Government appoint Additional Collector or Additional District Magistrate.

State Government/ U.T Administration in consultation with jurisdictional High Court, appoints District Judge or Additional District Judge as Rent Tribunal in each district.


Property Manager has been introduced as a new concept in the Act, the Property manager shall act on behalf of the landlord and tenant needs to be informed about the name of the property manager and proof of such person being assigned as manager by landlord. The property manager has various duties on behalf of landlord and such duties includes collecting rent, providing essential repairs, inspect premises time to time amongst many other duties mentioned under Section 19.


The growing demand of housing needs for all and with the view of providing the same to all strata of the society, the interests of both the landlords and tenant in mind and a central legislation to avoid confusion between stakeholders the government has made a commendable effort to introduce this act. The particulars of the act have been defined well and the needs of both the parties have been kept intact. With the introduction of Rent Authority, Rent Court and Rent Tribunals the dispute settlement mechanism shall be eased to a great extent, where in most of these cases have to be heard in thirty days (30) of the application being filed. The appeal filing mechanism is also kept simple wherein, anyone having a problem with the decision of Rent Court can file an appeal to Rent Tribunal within thirty days (30).

Although the vision of providing housing for all and catering to the demand may or may not be met is something that has to be looked at with the time to come, the government had introduced this act stating they wanted to enhance and work upon housing needs of people and since many vacant flats had been found under the census of 2011, this act shall help in bridging the gap. The present act, forms already existing laws and various norms that were already prevalent between a landlord and tenant while framing a tenancy agreement into a central legislation. Apart from dispute settlement courts and some other terms the basic gist remains the same in the introductory central act. So, how far does this act goes in providing housing is something that can be answered in a span of 2-3 years.