Union's Model Tenancy Act' 19 won't bring cheer to your lives. Here's why?

Ashish Kulshrestha | The Clear Picture

The Union government’s recent approval to the Model Tenancy Act 2019 is unlikely to bring any immediate relief to millions of Indians who migrate to different cities in search of livelihood as 29 states which form the Indian subcontinent need to implement the same in letter and spirit. This is because land is a state subject and the federal government can only make suggestions to the state.

For the uninitiated, there are three types of lists under the seventh schedule in our Constitution -the Union, State and Concurrent. The Union List has a range of subjects under which the Parliament can make laws while the state list relies exclusively with the state legislature. Concurrent list allows both Centre and state to make laws on the various subjects under the list.

According to advocate Ritesh Singh, “Land is a state subject where the State Legislative assembly can make, amend laws and, operate on it within the territory of its own". Currently, each state has its own Rent Control Acts to look after matters concerning rental housing and they may or may not choose to amend their existing laws.

“Model laws cannot be said to be a binding precedent, it is just a model proposal on archaic laws affecting everyone’s interest and it is totally on states to accept it or not. At present, they (states) can refuse or bring up their own acts according to their will. But the shape of these acts will completely be changed if in future a constitutional amendment comes up which presents a different act not in line with the provisions of the State act. says Singh, referring to the Model Tenancy Act.

However, he says it’s a step in the right direction and will play a big role in organising the rental market. Recounting his own experience as a law student in Pune, he had to face harassment from owners in the form of exorbitant demands for security deposit and constant intrusion by the landlord.

“The landlord would put all sorts of restrictions and come uninvited several times which also invaded my privacy,” he adds.

The new Act limits the security deposit for residential premises to a maximum two months' rent and a maximum of six months’ rent in case of commercial properties. It also stipulates the creation of a written contract under the oversight of a Rent Authority.

Hardeep Puri, Union minister for housing and urban affairs in a press briefing said, “The Model Tenancy Act provides a model for urban and rural properties and a template for residential and commercial properties. It will apply to future transactions and lead to specific contract arrangements between landlords and tenants. It would be a written agreement with the terms and conditions to be determined by the landlord and the tenant".

Several of the provisions of this Act are similar to the housing rental regulations in the United States where well defined regulations are in place to defend the rights of the tenants and landowners.

Devashish Sahay, an engineer from Ranchi, Jharkhand and currently based out of Arizona, Phoenix, USA talks about the benefits of an organised rental housing market. "It's interesting to witness India come up with a more defined regulations governing its rental housing market which will provide a level playing field for both tenants and landlords. During my college years when I moved to Pune, while I was subjected to moderately high rents, extremely high security deposits ranging up to 4-5 months of my monthly rent were a cause of worry for me".

Here in Arizona, Phoenix, there are multiple regulations ranging from credit checks to background verification but these systems are quite simplified and the role of a landlord is clearly defined which leads to visibly very low or no exploitation., says Sahay while adding, the deposits typically can range between a fourth of your month's rent to a full month's rent which comes as a big relief.

Surprisingly, the first rent control legislation in India was introduced immediately after the First World War in Bombay in 1918 and was followed by similar legislations for Calcutta and Rangoon in 1920, according to Satvik Dev's "Rent Control Laws in India: A Critical Analysis" report for Centre for Civil Society,

"By the end of the Second World War, almost all the major cities and towns in the countries were covered by rent control measures. All these acts, born out of the inflationary aftermath of the First World War, were conceived as purely temporary measures to provide relief to the tenants against the demand of exorbitant rent and indiscriminate eviction by the landlords due to scarcity of houses in the urban areas", the report adds.

While the Rent Control Act evolved world over, India has been slow in bringing reforms in the rental real estate sector and even the current Act is likely to take at least a few years before it is implemented in letter and spirit by states.