Proposed model tenancy law: Housing ministry to approach Cabinet for approval

The housing and urban affairs ministry will approach the Cabinet to take approval on its proposed model tenancy law at the earliest, and based on this legislation, states or Union Territories can frame their own new law or amend the existing one, its secretary Durga Shankar Mishra said Friday.

Addressing Assocham conference on real estate, he said all building approvals and completion certificates would be made available online within stipulated timeframe across the country as part of the ease of doing business objective.

On Thursday, the ministry released the draft model tenancy law and sought comments from public and other stakeholders. According to the draft law, landowners will have to give a three-month notice before revising rent. It proposes appointing district collector as rent authority and heavy penalty on tenants for overstaying.

"We have come out with a draft tenancy law as announced in the Budget. We are seeking comments on this draft from all statekholders including States," Housing and Urban Affairs Secretary Durga Shanker Mishra told reporters on the sidelines of a real estate conference organised by Assocham.

Based on the feedback, he said the model tenancy law would be finalised.

"We will approach union Cabinet for approval of this model law and then send it to states/UTs," Mishra said.

States or UTs could frame new law or amend their existing tenancy laws based on the central model law, he added.

Asked when the ministry will approach the Cabinet, the secretary said, "I will not be able to provide exact timeline. But this has been announced in the Budget, so its a direction for us".

Quoting a study, he said the rental housing market is worth Rs 1.5 lakh crore annually and this would grow with adoption of this model tenancy law by state governments.

According to the Census 2011, nearly 1.1 crore houses were lying vacant in the country and making them available on rent will complement the vision of 'Housing for All' by 2022, Mishra said.

Mishra said the government has taken several measures in the past five years to revive real estate sector such as new realty law RERA.

He said as many as 42,000 projects and 33,000 agents have been registered under this law. The regulatory authorities in different states have resolved 20,000 complaints.

Talking about the ease of doing business, he said online building approvals are already in place in 1,705 cities and hoped that local urban bodies across the country would have this facility.

"We are progressing towards seamless system," the secretary said.

Assocham's Senior VP Niranjan Hiranandani expressed concern about liquidity crisis in industry including real estate because of fund crunch with non-banking financial companies.