The State Cabinet on Thursday decided to bring in a law, based on the Model Tenancy Act circulated by the Central government, to replace the 57-year-old Buildings (Lease and Rent Control) Act. A Bill to this effect is expected to be introduced in the ongoing session of the Assembly. The Cabinet gave its nod to many other Bills that are of a “routine nature,” a source says.
Explaining the importance of the new legislative measure on tenancy, another source says that the proposed law will “unleash the real estate value of the property and promote the rental housing market” in the State. The 1960 law has outlived its utility. Due to it, not many house owners are willing to let out their properties on rent as eviction proceedings are “cumbersome”. The new legislation will address such defects. When rules are framed, they will be customised to suit the conditions of Tamil Nadu, said the source.
One more source in the government says that the new law is part of the commitments of the State under the Real Estate (Regulation and Development) Act, 2016 (Central Act 16 of 2016), which envisages the constitution of a Real Estate Regulatory Authority and a Real Estate Appellate Tribunal for each State.
Providing a balance
The new tenancy law seeks to balance the rights and responsibilities of landlords and tenants through rental contracts; enable registration of rental contracts with Rent Authorities; and expedite the adjudication process for resolution of disputes through Rent Tribunals. It will facilitate repossession of premises let out on rent by owners of the properties concerned through Rent Courts, and provide compensation of double the monthly rent to owners in case tenants do not vacate the premises after their tenancy has been vacated by an order, a notice or an agreement.
As per the model law, any officer not below the rank of Deputy Collector will be designated by the District Collector concerned as Rent Authority. Tenancy agreements, having a value of more than ₹50,000 or period of more than 11 months, will be made compulsory. They will have to be registered with Rent Authorities. The model law has also provided for the creation of Rent Courts and Rent Tribunals.
