The development comes at a time when the country faces shortage of proper rental housing facilities, especially for the lower-income groups and migrant workers, while there are over 1 crore flats vacant in urban areas.
The government on Wednesday cleared the model tenancy act (MTA), a major step towards institutionalisation of rental housing in India. The development comes at a time when the country faces shortage of proper rental housing facilities, especially for the lower-income groups and migrant workers, while there are over 1 crore flats vacant in urban areas.
The Union Cabinet approved the MTA for adoption and enactment by states and UTs to promote rental housing in India, ministry of housing and urban affairs (MoHUA), said adding, “Making 1.1 crore vacant houses available on rent will complement the vision of Housing for All by 2022”.
For comparison, Primus Partners and Guesture Co-living in a report last year said that India’s residential rental market touched annual figures of over $20 billion, or more than Rs 1.45 lakh crore (IMF). Of this, 68% ($13.5 billion) is in urban areas.
As a proportion of all housing, rental comprises around 11.1% of the total. As per 2011 census, the share of households living in rented facilities was 5% in rural areas, but 31% in urban areas. More than two-thirds of the urban rental housing market is unorganised, it points out.
Welcoming the act, Anarock Property Consultants chairman Anuj Puri said rental market has long been fragmented and underdeveloped, invariably creating pressure on the overall real estate industry. Leasing and renting of residential properties falls under the purview of Rent Control Act, with each state having its own version. Lack of proper legislation, tenant-landlord conflicts are quite common, leading to lengthy litigation.
“MTA 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 separate Rent Court and Rent Tribunal in every state/UTs to hear appeals for matters connected to rental housing,” he noted.
NoBroker CEO Amit Agarwal explained that MTA caps the security deposit to two months of rent and this liberates tenants from being forced to pay high and random deposit amounts to landlords. Besides, the landowner cannot cut power and water supply in case of disputes. They will also need to provide 24-hour notice to tenants to carry out repair work.
Nod to SCO pact
The Cabinet on Wednesday accorded an ex post facto approval for signing and ratifying an agreement on cooperation in the field of mass media between all member states of the Shanghai Cooperation Organisation (SCO). The pact aims to promote equal and mutually beneficial cooperation among associations in mass media.
Approval for India-Japan collaboration
The Union Cabinet on Wednesday approved a memorandum of cooperation with Japan in the field of sustainable urban development which is expected to create employment opportunities. According to an official statement, the memorandum of cooperation (MoC) will be signed between the Ministry of Housing and Urban Affairs and Japan’s Ministry of Land, Infrastructure, Transport and Tourism in supersession of an existing MoU of 2007 on urban development.
(With inputs from PTI)