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Model Tenancy law will be placed before Cabinet for approval soon: Housing Secretary

The government will also bring out detailed guidelines on Affordable Rental Housing Complexes (ARHC) for urban poor and migrants

Representative image

Representative image

The Ministry of Housing and Urban Affairs has finalised the Model Tenancy Law aimed at giving a push to rental housing and it will be placed before the Cabinet for approval soon.

The government will also bring out detailed guidelines on Affordable Rental Housing Complexes (ARHC) for urban poor and migrants, Housing and Urban Affairs Secretary Durga Shanker Mishra said on June 23 in a webinar organised by Confederation of Indian Industry (CII) and property consultant Savills, titled 'Resurgence: Real Estate 2020'.

“I hope that within this week I would be in a position to take it (Model Tenancy Law) to the Cabinet. I am hopeful that in the next 15 to 20 days we would be sending it to the states to pass it into law,” he said.

He hoped that all states would adopt the model legislation, which would go a long way in making the rental housing segment transparent and accountable.

As per Census 2011, there are 1.1 crore homes lying vacant in the country.


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The Model Tenancy Law would take care of the houses that are lying vacant today, he stated.

The government came out with the draft model tenancy law last year that proposes to establish an independent authority in every state and Union Territory for registration of tenancy agreements and even a separate court to take up all tenancy-related disputes.

Mishra said the government will soon come out with detailed guidelines on ARHC for urban poor and migrants. The scheme was announced by Finance Minister Nirmala Sitharaman as part of the Rs 20-lakh crore economic package to deal with the COVID-19 crisis.

The scheme is targeted at migrant labourers and the urban poor employed in the industries, service sector and manufacturing sector and would provide planned housing close to their workplace in industrial as well as in non-formal urban sectors.

The government will launch the scheme under PMAY(U) to provide ease of living at an affordable rent by either using existing housing stock as ARHCs or incentivising private/public agencies for construction of ARHCs.

“Under this, complexes constructed by the government can be converted (into affordable rental housing complexes) through the medium of a concessionaire or through the private sector. Land available with the public sector or with manufacturing companies can also be converted,” he said.

“We will grant permissions on land, provide for extra Floor Area Ratio (FAR) and tax concessions. We are preparing a model on this and very soon the government will bring in guidelines. This is to help migrants who leave their towns to come to cities. We have observed that the biggest casualty is the way they live – their housing needs are compromised significantly."

“If a factory can provide facilities for rental housing within the complex, it’ll be a win-win situation for labourers, business, industry and the promoters,” he said.

Savills India CEO Anurag Mathur said the office, warehousing and online retail segments are the least impacted and will be the first to recover. He added that warehousing and industrial, the new sunrise sectors, will see exponential growth going forward.

Commercial office has been impacted significantly, but he believes it will bounce back. "Regarding leasing, it is worth noting that ever since we had the boom in the commercial office segment, rentals have ranged around a dollar per square foot a month. Rents have gone up but the rupee has depreciated making the office very affordable," he added.


Raj Menda, co-owner and Corporate Chairman, RMZ Corp, suggested that owners should be allowed to compulsorily sign all contracts with multinationals in foreign exchange. “This would enable the country to receive valuable foreign currency and developers will be able to raise cheaper ECB loans. This would help us reduce costs by four to five percent and pass it on to customers.”
Vandana Ramnani

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