Mentors Comment:
Give an intro on the status of current tenancy laws and introduce the model act in it.
Mention the salient features of the act.
Discuss why it is needed and what are the proposed benefits of the act.
mention loopholes and what needs to be done to fix it.
Conclusion

Answer:
The rental market in India has long been ignored and has thus turned into an arena of dispute. Due to lack of proper legislation, tenant-landlord conflicts are quite common, resulting in a distorted rental market. Given this scenario, the recent formulation of the draft Model Tenancy Act 2019 has been welcomed by one and all. 

Highlights of the draft:
o It mandates the landowner to give a notice in writing three months before revising rent.
o It advocates appointing district collector as rent authority and heavy penalty on tenants for overstaying.
o According to it, tenants overstaying will have to pay double the rent for two times and four times thereafter.
o The security deposit to be paid by the tenant in advance will be a maximum of two months’ rent.
o Both landlord and tenant will have to submit a copy of rent agreement to the district Rent Authority which will also have the power to revise or fix rent following a request either by landlord or tenant.
o States will be free to adopt the law owing to land being state subject.
o States will be required to constitute rent courts and rent tribunal.
o If the landowner refuses to carry out the required repairs, the tenant can get the work done and deduct the same from periodic rent.
o A landowner cannot enter the rented premises without 24-hour prior notice to carry out repairs or replacement.
o Landowner cannot cut power and water supply in case of a dispute with the tenant.
o Rent Authority may direct for compensation on the person responsible for cutting off or withholding the essential supply.
o The Rent Authority may levy a penalty be paid to the landowner or tenant if it finds that the application was made frivolously.

Significance of this act for Housing Sector in India are as follows-
o It is expected to give a fillip to private participation in rental housing for addressing the huge housing shortage across the country.
o It will enable creation of adequate rental housing stock for various income segments of society including migrants, formal and informal sector workers, professionals, students etc. and increase access to quality rented accommodation, enable gradual formalization of rental housing market.
o The move could provide relief for both tenants and landlords and help take some load off India’s overburdened litigation process.
o As per Census 2011, nearly 1.1 crore houses were lying vacant in the country and making these houses available on rent will complement the vision of ‘Housing for All’ by 2022.
o It will unlock the potential of the vacant houses in India, by bringing transparency and accountability in the existing system of renting of premises and to balance the interests of both the property owner and tenant in a judicious manner.
o The creation of a rental housing stock will help students, working professionals and the migrant population, at large, to find accommodation.

While the proposals in the Model Tenancy Act have been widely welcomed, their implementation could be far from simple because:
1. The Act is not binding on the states as land and urban development remain state subjects. It is still a matter of choice for states and Union Territories to repeal or amend their existing Acts. Like in the case with RERA, the fear is that states may choose not to follow guidelines.
2. The cap on the security deposit which is not likely to find favour with many landlords. In cities like Bangalore, the norm is a ten-month security deposit as a two-month deposit is unlikely to cover any damage to the property or a default in rent payment by the tenant.

The Model Tenancy Act must be lauded and is a step in the right direction. It provides a clear roadmap for states to follow and tweak according to their local conditions and market. A fair and balanced tenancy law protecting the rights of all parties will go a long way in formalising and stabilising the rental market. If enforced by states in letter and spirit, it could revive the fortunes of not just the rental market but the housing sector at large.