Finance Minister Nirmala Sitharaman has proposed a model tenancy law to lay the ground for reforms to promote rental housing.
In her first Budget speech today, Finance Minister Nirmala Sitharaman has proposed a model tenancy law to lay the ground for reforms to promote rental housing. Current rental laws, she said, are archaic as they do not address lessor-lessee relationships fairly.
Modi Sarkar’s first Budget of its second term was a follow-up to the interim budget presented a few months ago. Yet it has proposed some far-reaching measures. One such far-reaching proposal is the promise of tenancy law reform.
The re-structured rural housing scheme Pradhan Mantri Awas Yojana-Gramin (PMAY-G), which has the objective of ‘Housing for All by 2022’, was launched by Prime Minister Narendra Modi in November, 2016. It has an ambitious target of 2.95 crore houses to be built by 2022.
This is no easy task. At the same time, there are tens of thousands of houses in Indian cities that are built but remain unoccupied. They remain unoccupied and an unproductive asset because neither the owner can afford to rent it out and nor can a tenant afford to occupy it. The reason is that tenancy laws are loaded against the owners in many cities. Loopholes allow unscrupulous tenants to grab the house or stay on after the lease has expired. This stops many owners from letting out homes they do not need for their own use.
The situation calls for the tenant-owner relationship to be established on a fair and reasonable basis. Reform of tenancy laws towards this end would bring into the market hundreds of thousands of built-up homes across the country especially in the metros. Thus, affordable homes would be available under a win-win arrangement that suits both lessor and lessee and puts an idle asset to good use.
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