Recently state Cabinet of Uttar Pradesh approved the Uttar Pradesh Regulation of Urban Premises Tenancy (second) Ordinance of 2021. The ordinance will reduce the tenancy disputes.

Features of the Ordinance

  • The ordinance makes it mandatory to sign contract will to rent out a property. This is being done to safeguard the interests of both the tenant and the owner.
  • The ordinance will establish rent authority and rent tribunal to solve disputes. Currently there are no clear mechanisms for conflict resolution.

Significance

  • The UP Regulation of Urban Premises Tenancy (second) Ordinance will help 1.1 crore vacant homes in the urban region to get suitable tenants in Uttar Pradesh.
  • It will encourage people to invest in more properties for renting purposes.
  • It will help in bringing robustness and dynamism to the real estate market. This is because the provisions in the ordinance will reduce the friction between property owners and tenants.

The ordinance is very much similar to the Draft Model Tenancy Act, 2019.

Model Tenancy Act, 2019

This Act was framed by the Union Ministry of Housing and Urban Affairs. It is yet to be passed in the parliament.  The key features of the Model Tenancy Act of 2019 are as follows:

  • Formation of Rent Authority. Every tenancy agreement should be reported to this rent authority.
  • For non-residential tenancy, the residential housing security deposit is to be capped at one month interval and for residential-housing security deposit is to be capped at two months interval.
  • The landlords should provide access to basic amenities.
  • The landlords cannot hike the property rent in the middle of a tenancy term.

The tenants shall not sublet the property without the permission of the landlord.

UP Regulation of Urban Premises Tenancy Ordinance UP Regulation of Urban Premises Tenancy Ordinance