Centre seeks to allay Mumbaikars’ concerns about new rent law

Durga Shanker Mishra, secretary, MoHUA, has said that the new Model Tenancy Act won’t impact the existing rental agreements.

  • Money9
  • Publish Date - July 22, 2021 / 03:47 PM IST
Centre seeks to allay Mumbaikars' concerns about new rent law
nder the MTA, tenants would be responsible for repairs of damages caused by them, cleaning drains, and the maintenance of gardens and open spaces.

Around 2.5 million middle-class people in Mumbai are uncertain over their rented homes at chawls or stand-alone buildings ever since the Union government approved the Model Tenancy Act (MTA), 2021, in June.

Seeking to allay their concerns, the ministry of housing and urban affairs (MoHUA) has assured that those living on rent, particularly through pagdi agreements, in Mumbai need not worry over the recently approved Model Tenancy Act as it would not affect them.

Durga Shanker Mishra, secretary in MoHUA, has said that the new law will be prospective in nature and won’t touch the existing rental agreements.

Tenants fear eviction, rent hike

On June 2, the Union government approved the MTA, a revision of the Rent Control Act, 1948, aiming to balance the rights of both property owners and tenants. As per the act, tenants will have to live under leave and licence agreements. The rent deal will stand for 11 months, after which it can be renewed.

Many people in Mumbai have been living in shanties of 180 to 380 square feet area for years as per rent agreement systems, of which they get a rent receipt every month.

A recent media report alleged that once the new law comes into effect, about 25% of Mumbai’s legal residents could face eviction.

Also, the Maharashtra Rent Control Act (MRCA), 1999—that froze rents at 1940s rates—will be repealed and the tenants will likely end up paying more.

At present, the maximum monthly rent in a chawl is Rs 250, which includes the rent of Rs 5 and a cess to the Maharashtra Repair Board. Under the MTA, tenants would be responsible for repairs of damages caused by them, cleaning drains, and the maintenance of gardens and open spaces.

Apart from these, owners will have the right to evict tenants if they fail to pay rent for two months. Owners can revise rents after the existing rent agreements expire.

Pagdi system

The Model Tenancy Act has also proposed to do away with the pagdi system, under which the houses are sold without formal registrations.

(Follow Money9 for latest Personal finance stories and Market Updates)

Latest Videos

Best of Money9