ANALYSIS OF MODEL TENANCY ACT, (DRAFT) AND TENANT AND LANLORD

RIGHTS WITH COMPARATIVE APPROACH TO USA AND UK

ABSTRACT: The Draft Model Tenancy Act, 2015, aims to achieve vital results for both,
tenants and landlords resulting in the uplifting of advanced affordable housing for all. As we all
know there are some issues regarding the rental market So, The Indian rental market have been
demanding a new law to counter the Rent Control Act, 1948, for a long time. Recently, the
government has shown interest in passing the Draft Model Tenancy Act, 2015, that will address
the difficulties of landlords and tenants. The objectives of the act are to mutually fixing and
revising rent between the landlord and tenant and Unlocking existing properties to rent out and
further addressing repossession issues in rental housing thus this draft if executed properly will
yet be another method of providing housing to India’s urban population, in this paper we will
look into the matter why many of state have not made it applicable and will analyze their
argument in a method to derive a solution and suggestions. The need to introduce the model
tenancy law was felt because the existing rent control laws are restricting the growth of the rental
housing segment and discouraging the landowners from renting out their vacant premises we will
discuss the various rights of the tenant and landlords in regard to the prior acts and under new
draft of model tenancy act. Since land is a subject of the state, this act is not binding on the states
and is, therefore, called a draft. It is left to individual states to decide whether to accept it or not
in the long run, most states would have to accept it since it is greatly beneficial to tenants.
Presently, the rent laws in most states have become archaic. This act can bring transparency as
well ease the process of business for both parties. The various case laws relating to the issue of
right of tenant and landlord will be discussed.
CHAPTER 1: INTRODUCTION
In India every state has their own law regarding tenancy matters. Where these state legislation is
absent of certain matters the central legislation regulate these matters by transfer of property act,
1872. However transfer of property act being the old legislation does not fit with the certain
matters of the 21st century Transfer of property act deals with the rights of landowner and tenant
by way of lease so, this is crystal clear that the codified exclusive legislation that deals with
rental matters in the real estate market has been ignored in India Lack of legal framework related
to the tenant resulted in the hampered growth of real estate marked and low investment in the
rental sector. The draft of model tenancy Act, 2015 was there made to codify the rental laws in
the country but in majority of the states the act is never implemented these states. In union
budget it was again proposed in front of the house to promote rental housing and to implement
the scheme of affordable housing and somehow to uplift the investment in the rental sector and
the old archaic laws will be removed by its implementation so the ministry of housing and urban
affairs have released the draft of model tenancy act, 2019 the main objective of which is to
regulate the rental housing and to the upliftment of the scheme of affordable housing and also to
provide the rights and duties of the tenant and the landlord so there can be more investment in
the rental It envisages to balance the interest and rights of both the owner and tenant and to
create an accountable and transparent ecosystem for renting the premises in disciplined and
efficient manner.

 NEED FOR RENTAL HOUSING : Housing is one of the main necessesity of

life it is stated that food clothing and shelter are one of the main sources of life the
rapid and fast growth of population and urbanization have led to the shortage of
housing in India so, people go for rental housing because of law income they
can’t afford house or build their own .In spite of shelter being one of the basic
need of life and a great concern for government and many of the population of
our country still lives in more congested area that means they still can’t afford the
houses either it is of ownership and is of rental.
The Draft National Urban Rental Housing Policy, 2015 (“the Policy”) pointed out
that there is a huge housing shortage in urban areas and on the other hand, there
are massive stocks of vacant houses1. There are lot of vacant houses the possible
reasons for this can be the lower rent yield, fear of repossession and lack of
incentives etc The Policy defines rental housing as a property occupied by
someone other than the owner, for which the tenant pays a periodic mutually
agreed rent to the owner2.

1
Draft National Urban Rental Housing Policy, 2015, p 10.
2
Draft National Urban Rental Housing Policy, 2015, p 5
 the policy suggested that  if these vacant houses are made available for rental
housing, then some, if not most of the urban housing shortage, could be
addressed.3
Hence the need for rental laws can be understood from the following heads that
can be crystal clear seen from :
1. The need for Rental laws can be considered as a alternative to the problem
of housing shortage may it be for ownership or tenancy in view of
increasing population of India.
2. Of getting rid to the problem of increasing slums in country by providing
affordable housing to them
3. It could became the steady source of source of income for the landlords
And the investment in the sector will increase drastically.

 PROBLEM OF RENTAL HOUSING IN INDIA : As per constitution rental

housing is the subject of state list in the constitution which means that state have
every right to legislate over the subject as it has been mentioned in entry 18 of list
ii in schedule 7 of Indian constitution Although the central government can guide
the states because we follow quasi federal or we can say cooperative federal
structure here the central government acts with the state government to act with
the same Therefore central government has power to legislate law on rental or
tenant laws implementation of which is truly based on the discretion of states.
As we see of now, every states have their own laws on rental housing that is rent
control laws and the jurisdiction of rent control laws is possessed in the name of
rent control laws. However these rent control does not satisfy the need of our they
can be said as more archaic and old to cover today’s scenario this can be clearly
seen by existing problems of today’s that is affordable housing etc.

The issues of rental lodging in India, as present under various existing rent control
laws, can be typified as follow:

o FIXATION OF STANDARD RENTS : As most of existing rent laws fix standard rent or
fair rent on the basis of the cost of construction involved and the existing laws does not
consider market value in fixation of standard rent this is considered one of the main
reasons for less investment in the rental sector because it will case huge distinctive to the
landlords and investors in the rental market.

3
o NO SUCH HARD AND FAST REMEDY FOR OVERSTAYING OF TENANTS:
Existing Rent laws do not provide any remedy for the landlords when tenants do not
vacate the premises of land lord after discharge of rent agreement or lease Therefore
landlords often fears that the might lose control over their property and to go through
long litigation process resulting in much loss.

o REDUCED LIQUIDITY FOR LANDLORDS:

Freeze of accessibility of rental lodging is obvious considering the long prosecution
procedures identifying with recuperation of rental premises by the landowner or
procedures identifying with ousting of occupants. At the point when the procedures are
experiencing, it is hard to lease the premises which are lis pendens and in this manner it
decreases liquidity for proprietors in the market.

o VAST AMMOUT FOR SECURITY DEPOSIT :

As we go from the view of the tenants it is unfair to demand vast amount at the beginning
of tenancy as security deposit this arbitrariness is because of the loopholes in the existing
laws that it does not have any fixed upper cap for the security amount that has to be
demanded by the landlords because of this practice many of the people are not be able to
afford these houses and this problem creates a huge hurdle between the goal of housing
for all.

o TENANT EVICTIONS ON FALSE GROUND :

As it has been seen the existing law does not provide any mandate on landlords or
proprietor to provide receipt for the received rent amount from the tenant so it has been
seen in many cases landlord files false cases against tenant for nonpayment of rent to
evict tenant maliciously though there are many provision likewise under specific relief
act to get rid of illegal possession but they are not seen to be much effective so that create
a lot of chaos and ambiguity in the present scenario.

o LEASE UNDER TRANSFER OF PROPERTY ACT, 1872 :

Under the transfer of property act, 1872 it defines lease as a lease of immoveable
property is a transfer of a right to enjoy such property, made for a certain time, express or
implied, or in perpetuity, in consideration of a price paid or promised, or of money, a
share of crops, service or any other thing of value, to be rendered periodically or on
specified occasions to the transferor by the transferee, who accepts the transfer on such
terms. The transferor is called the lessor, the transferee is called the lessee, the price is
called the premium, and the money, share, service or other thing to be so rendered is
called the rent. It is of the great concern under the lease agreement terms of the lease
agreement cannot be changed in between before the expiry of the existing agreement
 unlike it can be done in the rent agreement. In general landlords obtain to frame aren’t
agreement under the rent control laws as they can charge rent on month to month basis
and also can alter the terms of rent agreement whenever they want and as in practice
where there the vacancy rate is more and in these cases landlord frame lease agreement
under section 105 of transfer of property act, 1872 where the benefit from the rent control
laws fatal and another problem can be seen as such from the effect as both the rental laws
of the particular states and also Transfer of property act does not provide any mandate for
making of agreement in written this means these agreement can also be oral so because of
this glitch results in long litigation process.

o LEAVE AND LICENSE CONTRACT : Apart from the rent control laws and transfer of
property where we have discussed about rent agreement and lease people often use leave
and license as it has been stated in the Indian easement act,1882 section 52 of the said
Act defines license as- “where one person grants to another, or to a definite number of
other persons, a right to do, or continue to do, in or upon the immovable property of the
grantor, something which would, in the absence of such right, be unlawful, and such right
does not amount to an easement or an interest in the property, the right is called a
license.” Hence in simple words licensor gives the license to the licensee for thr usage of
the property without transferring any interest in immovable property. Thus it can be seen
as there are many laws regarding to accept the tenant landlord relationship so the
ambiguity or loopholes in such many laws can be used by the tenant or landlord to
influence the existing law as per their needs.
CHAPTER 2: OVERVIEW AND ANALYSIS OF MODEL TENANCY ACT

INTRODUCTION: Model tenancy act was designed to balance the interest of landlord and
tenant