The Gujarat government plans to introduce a new tenancy act by replacing the Bombay (now Gujarat) Rents, Hotel and Lodging House Rates Control Act, 1947 with India’s Model Tenancy Act 2021.
The new act is expected to be structured to ensure impartiality towards both owners and tenants of the properties. However, it will also protect the property owners from unjustifiable pestering by the tenants.
The new act will also have a provision to form a state-level authority for regulating the market of rental properties. The act will also aim at boosting the sense of accountability towards the owners, as in the present scenario there exists various concerns about renting out the properties. Also, as the act will be providing requisite safeguards to both the parties, the issues such as fear of harassment by tenants who do not vacate the premises will also be catered to, allowing for a smooth growth of rented properties in the state.
“The state government is likely to adopt the model act with no or minimal changes during the upcoming monsoon period of the state assembly,” sources said.
In view of the above, the state government will also establish a body on the lines of RERA (Real Estate Regulation Authority) for regulating all the rented property transactions. Also, as the model tenancy act makes it necessary for the landlord and tenant to ink a written agreement having details such as rent, period of tenancy and other related information, the new act further makes the process more coherent.
With the model act recommending that the security deposit be capped at two months’ rent for residential premises and six months’ rent for non-residential (commercial and industrial) premises, a more cordial relationship between the two parties can be in place, as the new act will also have a provision on sub-letting of properties.