New Tenancy Act Aims to Overhaul Rental Housing in India

India’s cabinet on Wednesday approved the Model Tenancy Act, which aims to overhaul the legal framework for rental properties in the country and address a massive housing shortage.

The new law balances the interests and rights of landlords and tenants, and proposes the establishment of a rent authority, separate rent courts and tribunals in every state to ensure speedy dispute resolution.

“The Model Tenancy Act is going to give a guiding framework to all states to make their respective tenancy acts contemporary,” said Samantak Das, chief economist and executive director, at property research firm JLL India. “Current acts will give way to the new ones and it will give confidence to homeowners for renting out existing vacant properties.”

Previous rent control laws in India were often tilted in favor of tenants and discouraged owners from renting out vacant houses for fear of not getting them back. The adoption of the new norms may unlock more than 10 million vacant houses and help the government achieve its goal of providing housing for the entire urban population by 2022, according to a statement by India’s Ministry of Housing and Urban Affairs.

“The act can fuel rental-housing supply by attracting more investors, and more rental housing stock will help students, working professionals and migrant populations to find urban accommodation, especially in Covid-19-like exigencies,” Anuj Puri, chairman at Anarock Property Consultants, said in an emailed statement.

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