June 03, 2021 - CREDAI Bengal Homes
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June 03, 2021
CREDAI Bengal Daily News Update | 03.06.21
Newspaper/Online Money Control ( online )
Date June 02, 2021
https://www.moneycontrol.com/news/business/real-estate/model-tenancy-act-
Link how-will-it-help-how-will-it-be-implemented-and-other-questions-answered-
6980011.html
Model Tenancy Act: What it means for you, how it will help, and
other questions answered
Real estate experts say that the Act can fuel the rental housing supply pipeline by
attracting more investors, and more rental housing stock will help students, working
professionals and migrant populations to find urban accommodation, especially in
COVID-19-like exigencies.
The Cabinet on June 2 approved the Model Tenancy Act for circulation to the States/Union
Territories for adoption. It is aimed at opening up of the vacant housing stock for rental housing
purposes and helping bridge the trust deficit that exists between tenants and landlords by clearly
delineating their obligations.
Real estate experts say that clear-cut incentives to boost rental housing via a sound policy will
positively help the government to further strengthen its Housing for All initiative.
To ensure speedy redressal of disputes, the Act calls for establishing a separate Rent Court and
Rent Tribunal in every state/UTs to hear appeals for matters connected to rental housing.
It also seeks to establish an independent authority in every state and Union Territory for
registration of tenancy agreements. Only the rent court and no civil court will have the
jurisdiction to hear and decide the applications relating to disputes between landowner and
tenant and matters connected with it. It calls for disposal of complaints and appeals by the Rent
Court and Rent Tribunals within 60 days.
Under the Model Tenancy Act, unless otherwise agreed in the tenancy agreement, the landlord
will be responsible for activities like structural repairs except those necessitated by damage
caused by the tenant, whitewashing of walls and painting of doors and windows, changing and
plumbing pipes when necessary and internal and external electrical wiring and related
maintenance when necessary.
On his part, tenant will be responsible for drain cleaning, switches and socket repairs, kitchen
fixtures repairs, replacement of glass panels in windows, doors and maintenance of gardens and
open spaces, among others.Real estate experts say that the Act can fuel the rental housing supply pipeline by attracting more investors, and more rental housing stock will help students, working professionals and migrant populations to find urban accommodation, especially in COVID-19-like exigencies. To apply to residential and commercial properties The Act will apply to premises let out for residential, commercial or educational use, but not for industrial use. It also won’t cover hotels, lodging houses, inns, etc. This model law will be applied prospectively and will not affect existing tenancies. It seeks to cover both urban as well as rural areas. The Act says that a security deposit equal to a maximum of two month’s rent in case of residential premises and maximum of six month’s rent in case of non-residential premises would have to be paid by the tenants. How will states implement it? As per the memorandum of understanding signed between the states and union territories under PMAY-U, the states and union territories would legislate or amend the existing rental laws on the lines of the Model Tenancy Act. Why was a need felt to bring this on The housing and urban affairs ministry had floated the draft model tenancy law in July 2019. Without a well-rounded rental policy and the proper implementation of rental contract, there was no sound mechanism to resolve tenant-landlord conflicts. Property owners find it challenging to evict tenants if they misuse the property. To steer clear of such complications, such property owners often chose to keep these homes vacant instead of renting them out. Unattractive rental yield. In India, the rental yield for residential property is quite low, even in bigger cities. It is in the range of 1.5% to 3% of the capital values. This has disincentivised people from investing in second or third homes which could be rented out. NRIs have historically found it challenging to rent out properties because of the complexities of getting good tenants, managing rental agreements, and taking care of the maintenance of these properties. Often, they also prefer to leave their properties vacant in case they return to India. NRIs avoid leasing their residential properties for fear of squatters and dealing with the legalities of eviction. How will MTA help It will unlock vacant houses for rental purposes The Model Tenancy Act will facilitate unlocking of vacant houses for rental housing purposes. As per Census 2011, more than 1 crore houses are lying vacant in urban areas across the country. The existing rent control laws have been restricting the growth of rental housing and discouraging owners from renting out their vacant homes due to fear of the tenant to vacating the premises.
It will enable creation of adequate rental housing stock for all the income groups thereby addressing the issue of homelessness. Rental housing is a preferred option for students and migrants. It will balance the rights of both landlords and tenants The Act seeks to balance the rights of both landlords and tenants to promote rental housing. It is aimed at bridging the trust deficit between tenants and landlords by clearly delineating their obligations. There is no monetary ceiling under MTA, which enables parties to negotiate and execute the agreement on mutually agreed terms. It will give confidence to landlords to let out their vacant premises, the housing ministry said. MTA mandates for a written agreement for all new tenancies which are to be submitted to a Rent Authority. A digital platform will be set up in the local vernacular language or the language of the state/UT for submitting the tenancy agreement and other documents. The Model Tenancy Act addresses issues faced by landlords and tenants such as the requirement to have a formal rent agreement, how much security deposit should be paid, rate of rent increase and the grounds for eviction. It has proposed limiting the advance security deposits to two months’ rent, and has also suggested heavy penalties for tenants who decide to overstay. Those who do may have to shell out double the rent for two months and even four months. Other provisions in the Act include limiting the tenant’s advance security deposit to a maximum of two months’ rent and to a maximum of six months for non-residential purposes. The Act also tries to address how a renter can legitimately increase the rent. The Act states that rent can either be increased according to the terms and conditions mentioned in the agreement, or the landowner will have to give a notice in writing to the tenant, three months before the revised rent comes into effect. Time bound and robust grievance redressal mechanism comprising the Rent Authority, Rent Court and Rent Tribunal to provide fast track resolution of disputes. The landowner cannot cut power and water supplies in case of a dispute and would have to provide a 24-hour notice to tenants to carry out repair work. Should the landlords wish to increase the rent, they will need to provide a three-months’ notice to the tenants. “These measures would go a long way in protecting the rights of a tenant as it regulates the rent hikes that tenants have had to face. The Act has got approved at the right time as many tenants have been facing liquidity crunch due to the pandemic and ensuing salary cuts and layoffs. It would also protect the interests of the owners as many houses have been vacant and the necessity of a formal rental agreement in place would help them get closures," said Amit Agarwal, CEO and co-founder at NoBroker.
It will not impact existing tenancies MTA will be applicable prospectively and will not affect existing tenancies. The rent and duration of the tenancy will be fixed by mutual consent between the owner and tenant through a written agreement. Rental housing lucrative proposition for REITs and FDI MTA will help in overhauling the legal framework vis-à-vis rental housing across the country and is expected to give a fillip to private participation in rental housing. Experts say that rental housing can gain traction with a conducive policy framework which shall attract corporate players to provide serviced apartments for their employees. It also gives a lucrative proposition for REITS and Foreign Direct Investments players with steady income as well as appreciation in the property value. Realtors' body NAREDCO had said earlier that the proposed model tenancy law, if implemented by all states, will promote rental housing in a big way and it expected builders to construct at least 50 percent of its total inventories for rent purpose in the next five years. Challenges ahead While the proposals of the Model Tenancy Act have been widely welcomed, their implementation may not be very simple. The Act is not binding on the states as land and urban development remain state subjects. It is still a matter of choice for states and Union Territories to repeal or amend their existing Acts. Like in the case with RERA, the fear is that states may choose not to follow guidelines, diluting the essence of the Model Act. “While the government lays down the basic policies, the exact rules will likely change within each state since land is a state subject. Like we saw in the highly lopsided roll-out of RERA, the Model Tenancy Act, 2019 may lose its real purpose if states do not follow the basic guidelines and dilute them. For this reason, the Model Tenancy Act, 2019 - like RERA - may well become a process rather than an event, and need several course corrections to reduce regional dilutions before it becomes a force to reckon with," said Anuj Puri, Chairman - ANAROCK Property Consultants. Also, the Model Act is prospectively applicable and will not affect the existing tenancies. The repeal of rent control Acts can be governed by political exigencies. This may be a complicated process in cities like Mumbai, where tenants have occupied residential properties in prime areas for absurdly low rents. The cap on the security deposit may not find favour with many landlords. In cities like Bengaluru, the norm is a 10-month security deposit as a two-month deposit may be insufficient to cover any damage to the property or compensate for defaulted rent payments. Devendra Deshmukh, Partner, Khaitan & Co points out that the provisions of the proposed Model Tenancy Act (MTA) will have to be seen in light of the existing tenancy laws, most of which (baring a few exceptions) were enacted post the Second World War with the specific purpose of preventing exploitation of tenants by landlords, in markets that then had scarce housing stock.
The welfare objective of the existing tenancy laws, which are heavily skewed in providing tenant protection, appears to be fading away when we have instances of tenants occupying prime premises for paltry rents. “In order to truly open-up the rental market as an evolved one, it is imperative for the Government to formulate a way to balance social welfare of tenants and the economic interests of landlords. Balanced protection to landlords and tenants alike will provide impetus to landlords to rent out vacant premises,” he says. In the present form, the draft legislation envisages a three-tier dispute redressal mechanism and lacks provisions which can mitigate long drawn landlord–tenant litigations, he says. _____________________________________________________________________________
Newspaper/Online ET Realty ( online )
Date June 03, 2021
Link https://realty.economictimes.indiatimes.com/news/infrastructure/cabinet-
gives-nod-to-india-japan-collaboration-on-urban-development/83195199
Cabinet gives nod to India-Japan collaboration on urban
development
The MoC is expected to create employment opportunities in the areas of sustainable urban
development, including urban planning, smart cities development, affordable housing,
sewerage and waste water management & transit-oriented development.
The Union Cabinet on Wednesday approved a memorandum of cooperation with Japan in the
field of sustainable urban development which is expected to create employment opportunities.
According to an official statement, the memorandum of cooperation (MoC) will be signed
between the Ministry of Housing and Urban Affairs and the Ministry of Land, Infrastructure,
Transport and Tourism, Japan in supersession of an existing MoU of 2007 on urban
development.
The MoC is expected to create employment opportunities in the areas of sustainable urban
development, including urban planning, smart cities development, affordable housing, urban
flood management, sewerage and waste water management, urban transport -- including
intelligent transport management system -- transit-oriented development and multimodal
integration and disaster resilient development.
The proposed memorandum of cooperation will enable exchange of key learnings and best
practices, the statement said.
A Joint Working Group (JWG) will be constituted to strategise and implement programmes on
cooperation under the framework of the MoC. The JWG will meet once in a year, alternately in
Japan and in India.
The cooperation under this MoC will commence on the day it is signed and continue for a
period of five years.
The agreement will promote strong, deep and long-term bilateral cooperation in the field of
sustainable urban development between the two countries, the statement said.
The Union Cabinet was also apprised of a memorandum of understanding signed between the
Ministry of Housing and Urban Affairs and Ministry of National Planning, Housing and
Infrastructure, Maldives on cooperation in the field of sustainable urban development.The MoU was signed in February this year. The objective of the MoU is to facilitate and strengthen India-Maldives technical cooperation in the field of sustainable urban development, including urban planning, smart cities development, solid waste management, affordable housing, urban green mobility and urban mass rapid transport, another statement said. ________________________________________________________________
Newspaper/Online ET Realty ( online )
Date June 02, 2021
Link https://realty.economictimes.indiatimes.com/news/residential/kerala-cag-finds-
lapses-in-pmay-gramin-rollout/83169546
Kerala: CAG finds lapses in PMAY-Gramin rollout
Under the Pradhan Mantri Awaas Yojana—Gramin (PMAY-G) in Kerala, it was
intended to provide houses to 42,431 identified beneficiaries in rural areas.
The report of the Comptroller and Auditor General (CAG) on the state’s performance in
general and social sectors has found instances of misappropriation of funds, loss of central
government’s assistance, internal control deficiencies, underutilisation of assets, and
shortcomings in implementation of rules and programmes involving Rs 203.97 crore in the
financial year ending March, 2019.
Under the Pradhan Mantri Awaas Yojana—Gramin (PMAY-G) in Kerala, it was intended to
provide houses to 42,431 identified beneficiaries in rural areas. The project was to be completed
within 12 months from the date of sanction. The report said non-assessment of housing
shortage, lack of convergence and shortcomings in technical and quality supervision, persisted
in the project implementation.
The grama panchayats had failed in selecting eligible beneficiaries and creation of permanent
wait list (priority list), assisting the old and infirm in construction of houses, identifying land to
landless and converging the schemes for access to basic amenities. The auditor also pointed out
irregular sanctioning of houses and block panchayats’ failure to facilitate loans to beneficiaries.
There were also instances of construction of houses without obtaining building permits from
GPs and clearances from Kerala Coastal Zone Management Authority. The state lost central
assistance of Rs 195.82 crore during 2016-18 due to its failure to attain physical and financial
progress prescribed by it. Monitoring was also deficient at various levels of programme
management units, the report said.
The report pointed out instances where funds released by the state government for creating
public assets for the benefit of the community remained unutilised or blocked due to
indecisiveness, lack of administrative oversight and concerted action at various levels.
Failure to adhere to provisions and lax supervisory controls resulted in misappropriation of Rs
1.84 lakh in General Hospital, Neyyattinkara, Rs 6.46 lakh in the District Hospital, Mavelikkara
and suspected misappropriation of Rs 0.83 lakh in Taluk Hospital, Fort, Thiruvananthapuram.
The purchase of a mobile incinerator for Rs 2.14 crore by the local self-government department
without assessing its economic viability resulted in its under-utilisation and consequent
decommissioning. The failure of Kolazhy grama panchayat to adhere to the Kerala Panchayat
Raj (Property Tax, Service Cess and Surcharge) Rules, 2011, led to revenue loss of Rs 37.71lakh. Failure on the part of Thiruvananthapuram Corporation to safeguard blasted rubble obtained from the Vilappilsala Solid Waste Management Project resulted in loss of Rs 31.02 lakh and failure of Kothamangalam Municipality to collect and remit service tax in time led to a loss of Rs 23.64 lakh. The construction of a modern fish market by the corporation without proper study and correlating its design with the requirements of the vendors resulted in non-utilisation of the modern fish market constructed for Rs 23.25 lakh. The report also pointed out the failure of district collectors and the central plan monitoring unit in complying with the Centre’s directions to convert members of parliament local area development scheme savings bank accounts into Savifix/ Saviplus accounts resulted in loss of interest of at least Rs 4.76 crore. ________________________________________________________________
Newspaper/Online ET Realty ( online )
Date June 02, 2021
Link https://realty.economictimes.indiatimes.com/news/residential/andhra-pradesh-
cm-to-launch-housing-scheme-today/83195316
Andhra Pradesh CM to launch housing scheme today
The state government will spend about Rs 28,000 crore for the housing scheme which is considered
to be the biggest to be launched in one-go.
The Andhra Pradesh government will launch construction of about 15.6 lakh houses for the poor
under YSR Jagananna Housing Scheme on Thursday.
Chief minister Y S Jagan Mohan Reddy will virtually lay the foundation stone for the housing colonies
from the camp office.
The state government will spend about Rs 28,000 crore for the housing scheme which is considered to
be the biggest to be launched in one-go.
The state government is planning to construct another 12.70 lakh houses in the second phase of the with
a cost of Rs 22,860 crore after completing the first phase programme by 2022.
The state government has readied a blueprint for the mega housing scheme to ensure all the poor who
have been granted house-sites recently will become house owners by 2023.
In addition, the state government will be spending funds on construction of dedicated roads, drains,
electricity, drinking water, parks and open auditoriums in all the housing colonies.
Chief minister YS Jagan directed the officials to keep in mind that they were not merely constructing the
new housing units but new villages.
“We are providing all required infrastructure in the housing colonies to see that the beneficiaries would
move into their own houses immediately after construction. Chief minister YS Jagan had directed us to
create housing colonies as the best one in the country,” said housing minister Cherukuvada Srirangantha
Raju.
________________________________________________________________Newspaper/Online ET Realty ( online )
Date June 02, 2021
Link https://realty.economictimes.indiatimes.com/news/infrastructure/telangana-
gearing-up-for-digital-land-survey/83169389
Telangana gearing up for digital land survey
Seventeen companies participated in the discussion. Chief Minister K. Chandrasekhar
Rao is likely to hold a meeting with these companies shortly on the issue.
Telangana Chief Secretary Somesh Kumar on Tuesday held a preliminary meeting with various
companies to take up digital land survey in the state.
Seventeen companies participated in the discussion. Chief Minister K. Chandrasekhar Rao is
likely to hold a meeting with these companies shortly on the issue.
During the discussion, the Chief Secretary enlisted the views of the companies and the problems
encountered by them while taking up similar surveys in other states. The methodology,
technology to be adopted, time and cost factor, availability of survey equipment and technical
persons, requirement of software, hardware and internet bandwidth were some of the issues
which figured in the discussion.
Principal Secretary, Industries, Jayesh Ranjan, Commissioner, Stamps and Registration,
Seshadri, Telangana State Technology Services (TSTS) MD Venkateswar Rao, Commissioner
Settlements Sashidhar and other officials were present.
The Chief Minister had announced early this year that a comprehensive digital land survey will
be undertaken and tenders will be floated for the project soon.
This is the first time in 90 years that a comprehensive land survey will be undertaken in the
state. It is expected to not only end disputes but also lead to transparency in the land records.
The Chief Minister asked the officials to invite tenders for a comprehensive digital land survey
across the state using geographic coordinate system.
While the total cost of the project is expected to cost around Rs 600 crore, the state government
has allocated Rs 400 crore in 2021-22 budget and promised to make the remaining amount
available in 2022-23.
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