Model Tenancy Act & Its Impact
Subhankar Mitra, Managing Director, Advisory Services (India), Colliers. About 28% of urban India lived in rented houses, according to Census 2011. The number has gone upward over the last decade because of rapid urbanization, which far outpaced the supply of affordable dwelling units in the cities. Despite having nearly one-third of cities living in rental houses, it never got much attention from the government. At present, rental housing is highly fragmented, unorganized, and burdened with cumbersome rules and regulations, resulting in bitter disputes between the Landlord and the Tenant. The Model Tenancy Act, which was drafted by the ministry of housing and urban affairs last year, now got approved by the government of India's government. The government will now send the model act to the state governments, who can enact their law since housing is a state subject. Few provisions in the act make it a powerful document in rejuvenating the sector. These are as follows: The model document paves the way formalization of the vast rental housing sector. It is, in a sense, a RERA moment for the rental housing, which will make it possible for the institutions to get into the industry and own housing stocks that are given out on rent. India is likely to double its urban population over the next three decades. It will require a massive supply of housing. At least one-third of it needs to be directed towards rental ownership. The model document will provide a good base for the organized players to look at the sector positively. If the government takes the next step to provide cheaper financing and tax incentives for rental housing, it could become a viable REIT product. It would attract domestic and foreign investment.
Tags : Press Room Rent RERA REIT Government of India India MODEL TENANCY ACT Subhankar Mitra Colliers Law Impact urban population