Model Tenancy Act Will Be a Game-Changer – Say Realty Experts
Real Estate Experts express their views on the Government’s approval of the Model Tenancy Act which will adopt the changes by enacting fresh legislation or amending their existing rental laws.
Anuj Puri, Chairman – ANAROCK Property Consultants, “The Model Tenancy Act will help bridge the trust deficit between tenants and landlords by clearly delineating their obligations and will eventually help unlock vacant houses across the country. To ensure speedy redressal of disputes, the Act also proposes to establish a separate Rent Court and Rent Tribunal in every state/UTs to hear appeals for matters connected to rental housing. This Act can fuel the rental housing supply pipeline 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). Once implemented in all fairness across states, it will go a long way in formalising and stabilising the rental market. It would also revive the fortunes of not just the rental market but the housing sector at large. However, while the Model Tenancy Act is a step in the right direction by providing a clear roadmap for states to follow, it will remain to be seen to what extent the states will toe the central government’s line.”
Shishir Baijal, Chairman & Managing Director, Knight Frank India, “In the recent past, a spate of policy reforms in quick succession have accelerated the development of Indian real estate sector into a more mature and organised sector. Laws relating to RERA, REIT, GST and now Tenancy will aid the property sector’s transformation into a more transparent and consumer focused one; and thereby attract the world’s best institutional investors and developers for greater participation in the country’s realty sector. While tenancy in commercial real estate segment has been a well-established tenet of the market model, the fractured landlord tenant relationship in case of housing segment has discouraged development of market model and obstructed institutionalisation of a rental housing market. The Model Tenancy Act has provisions to regulate the rights and duties of both the landlord and tenant and this shall balance the scale between both these counter parties. We believe this law is a step in the right direction and are glad to see that in just under two years since the introduction of model law, and amidst the pandemic, this will become a ground reality.”
Ramesh Nair, real estate industry veteran and former CEO of JLL India. “Housing for all cannot be successful without a robust rental housing model. The act will help reduce slums and also improve the quality of housing in the country if well implemented. All efforts of previous governments have focussed only on the ownership of housing. A robust implementation can also help attract FDI given the current interest levels of global real estate funds towards “beds” (residential rental) and “sheds” (warehousing).”
Anuranjan Mohnot Managing Director & CEO, Lumos Alternate Investment Advisors. “The implementation of the Model Tenancy Act is one of much-required reform in real estate especially when the country has a peculiar problem of housing shortages when lakhs of residential units are vacant across India. The legal comfort to landowners about quick redressal to the problem of overstaying tenant, as well as protection of tenant rights on arbitrary rent increase etc can bring much required institutional investment in the “built to rent residential segment” in India.”
Pankaj Bhansali, COO, Eqaro Guarantees Pvt Ltd,” The Cabinet approval for the Model Tenancy Act will provide the much-required boost to Rental Housing in India. It is a landmark reform that will usher in a new era for the real estate sector in the country. The move will help address the high number of vacant residential units in India, which is over 11 million houses, making it economically productive, reducing litigation, and encouraging trust between the landlord and the tenants. The new model Tenancy act will also encourage and attract institutional investments into the residential assets. Rental bonds coupled with the new act will provide the much-needed ease of renting the houses for landlords. Rental Bonds and the provisions of the model tenancy act will help address the friction points in the tenancy process, thus promoting trust between the landlord and the tenant. The new act would bring in over 11 million urban houses into the rental market and help address the country’s massive housing shortage. We expect states to act swiftly and adopt the law, have the necessary regulatory structure in the form of state tribunals to adjudicate on the required matters and provide a common framework across the country. The rental yield in India is amongst the lowest in the world. The Act once adopted and enforced by states promises to create a sustainable and inclusive rental housing market in the country. Like the RERA law, the Model Tenancy Act will reform the rental housing business in India with utmost transparency.”