Reform in tenancy law long overdue
Given the Narendra Modi government’s target of achieving Housing For All by 2022, the proposed Model Tenancy Law is a long-awaited reform. The draft law addresses core issues like rent control, contract regulation and protection of landlord-tenant rights, and seeks to bring in transparency and rationality in the very skewed market.
One of the most important highlights of the proposed law is the setting up of rent authorities at state level to deal with related disputes, thus freeing the civil courts from such cases. This will speed up resolution of rental disputes while reducing case pendency in those courts. The draft has also dealt with other major contentious issues of security deposit or advance, and overstaying, and lays the groundwork for ensuring due rights to both landlord and tenant.
These measures will certainly boost the rental housing scenario in the country that has been caught in a muddle. The Economic Survey 2018 had brought out the serious mismatch between availability, off-take and demand-supply. Despite the shortage of housing in urban India, there is also an increase in vacant houses. The Survey pointed out that more than one crore houses were vacant in urban areas and as such constituted 12% of the total urban housing stock in the country.
Despite such vacancies, there has been no let up in rental prices. In fact, a report analysing rent rate trends has revealed that rent inflation was 18%in Mumbai in 2018 while cities like Chennai and Bengaluru recorded around 15%. This is at a time when Mumbai has nearly five lakh residential houses vacant and Bengaluru three lakh.
Making the case for promotion of rental housing, the Economic Survey pointed out that it is as important for access to shelter as housing. Rental accommodation provides shelter to people coming to and settling in the city for work or vocation until they are able to purchase their own homes. The draft law gives a holistic perspective to the Housing for All mission and should be adopted by the states on its legislation.