NEW DELHI: Realtors' body NAREDCO Monday said the proposed model tenancy law, if implemented by all states, will promote rental housing in a big way and it expected builders to construct at least 50 per cent of its total inventories for rent purpose in the next five years.
The Union housing and urban affairs ministry has put the draft of 'The Model Tenancy Act, 2019' in public for consultation. The announcement in this regard was made in this year's Budget.
"The draft model tenancy law protects all stakeholders, including land owners and tenants. This will promote rental housing in a big way," NAREDCO President Niranjan Hiranandani told reporters here. The association, he said, is studying the draft law and will submit its recommendations.
Hiranandani hoped that all states will frame their own law based on this model law prepared by the Centre.
"I expect that developers will put 50 per cent of their products under rental housing," he added.
NAREDCO Chairman Rajeev Talwar said the recent announcement in the Union Budget concerning the promotion of the rental housing sector promises new growth areas for developers.
The association's Vice-Chairman Parveen Jain emphasised on faster adoption of modern construction technologies.
"This will help in faster deliveries and will eventually help homebuyers." Earlier this month, the Centre proposed a 'Model Tenancy Law', under which the landowners will have to notice in writing three months before revising rent, a move aimed at regulating renting of premises in the country.
The proposed law also advocates appointing a district collector as rent authority and heavy penalty on tenants for overstaying.
According to it, tenants overstaying will have to pay double the rent for two times and four times thereafter.
Expressing concern over the liquidity situation of developers, NAREDCO said there is a need to find some alternative funding options for builders. The ban on subvention scheme will affect the funding in the sector.
The sector is facing major challenges on liquidity squeeze, ease of doing business, land acquisition, lack of skilled workforce, and higher development rates, it added.
The association announced its 15th annual edition of national convention, themed on 'Housing for All 2022 Real Estate Inflection Point: Readying for Future', will be held on August 19 where these issues will be discussed.