The Union Cabinet, presided over by Prime Minister Narendra Modi, on Wednesday approved the Model Tenancy Act. The move is aimed at overhauling the legal framework with respect to rental housing across the country.
The Centre, following the Cabinet decision, issued a statement saying the Act is expected to give an impetus to private participation in rental housing as a business model for tackling the huge housing shortage. The first draft of the act was released by the government in 2019.
"The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the Model Tenancy Act for circulation to all states/union territories for adaptation by way of enacting fresh legislation or amending existing rental laws suitably," the statement read.
The Act will enable institutionalisation of rental housing by gradually shifting it towards the formal market, the government said.
"The Model Tenancy Act aims at creating a vibrant, sustainable and inclusive rental housing market in the country. It will enable creation of adequate rental housing stock for all the income groups thereby addressing the issue of homelessness," it stated.
The Act will facilitate unlocking of vacant houses for rental housing purposes, it said, adding that it is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage.
Talking about the Model Tenancy Act, Union Minister for Housing and Urban Affairs Hardeep Singh Puri said it will provide an overall regulatory framework for the rental housing sector.
He noted the Act will apply to future transactions and would be a written agreement "with terms and conditions to be determined by the landlord and the tenant." Puri said implementation of the Act will "build confidence in the landlord."
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