Model Tenancy Act 2021

Model Tenancy Act 2021 Rent Guide

Model Tenancy Act was introduced to bridge the gap between the tenants and landlords. To avoid the malpractices the Government established the Act.The Act, according to the government, aims to formalise the rental housing shadow market, unlock vacant properties, enhance rental returns, ease/remove exploitative activities, minimise registration procedural bottlenecks, and increase transparency and discipline.


The Model Tenancy Act, 2020 was established with an intent to overcome the trust gap between renters and landlords by explicitly defining their responsibilities. It also recommends establishing a Rent Court and a Rent Tribunal to hear problems relating to rental housing to ensure the prompt resolution of conflicts. A number of decisions were taken to bridge the gap between both parties.

To read more on Model Tenancy Act 2020


In June 2021, the Union Cabinet adopted The Model Tenancy Act, 2021, for distribution to all states to adopt through new legislation. The new laws aim to bring about harmony among the landlords and the tenants. The research report's goal is to outline the rental housing market's problems and opportunities.

The Model Tenancy Act of 2021 establishes the underlying laws of tenancy in black and white.

The Model Tenancy Act, 2021 intends to build an effective regulatory environment in India to manage landlord-tenant interactions by laying down the fundamental laws of tenancy in black and white. Because there was no consistent rental housing law in the country, landlord-tenant relationships were contaminated in the past owing to trust difficulties. Despite the fact that several states adopted the Rent Control Act in 1950.

Shishir Baijal, Chairman & Managing Director, Knight Frank India, commented on the development, saying, "As the majority of the population in the top eight cities lives in informal rental housing accommodation, the new Act will provide a huge opportunity for private housing operators and institutional investors in the organized rental housing market." When the Act is fully implemented throughout the country.  

The latest updates to the Act are listed below:

Property Manager: 

The Model Tenancy Act of 2021 precisely outlines the role of property managers, their responsibilities, and the penalties that they will face if they violate the law. Property managers would be required to provide information such as their name, PAN number, Aadhar number, address, and contact information to the Rent Authorities under the Act. 

Establishment of a three-tier redressal system:

Rent Authorities, Rent Courts, and Rent Tribunals will be introduced as a result of the Model Tenancy Act 2021. These regulatory organizations will relieve the civil courts of a load of tenancy disputes and aid in the resolution of disputes as quickly as possible.

Demand for security deposits has been restricted:

The Act limits the security deposit, which must be paid in advance by a tenant, to a) not more than two months' rent for residential premises, and b) not more than six months' rent for non-residential premises.

Clear accountability of the Tenants and Landlords:

The dos and don'ts of each party (landlords and tenants) are clearly defined, covering a wide range of topics such as the retention of original tenancy agreements, rents and other charges due, property repair and maintenance, entry into premises, as well as information and duties of a property manager and the consequences of failure to perform required duties.

Creation of a digital platform: 

The capacity to access real-time information is critical for making educated decisions in the digital age. A central database can be built for a solid digital infrastructure that can be administered by States and UTs and can be a holistic means to obtain or store tenancy-related information. This database should be expanded to contain more information about landlords and tenants' previous tenancies.

In conclusion, The Model Tenancy Act, 2021 is essential since it reduces the burden on Civil Courts. It is crucial since it protects both the landlord and the renter. Some landlords violate their tenants' right to privacy by visiting the property unannounced or needlessly. The Act takes care of it. It also protects a renter from an unexpected increase in rent. As a result, as can be seen, it is anticipated that state tenancy legislation based on the proposed Model Tenancy Act will benefit both landlords and tenants, resulting in a win-win situation. The establishment of a grievance redressal system with a process that ensures prompt resolution would function as an incentive for both parties and promote greater leasing of premises. It would also ensure fair business dealings.


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