The Gujarat government plans to introduce a new tenancy act for the state to replace the Bombay (now Gujarat) Rents, Hotel and Lodging House Rates Control Act, 1947.
Although the new act will be structured to ensure impartiality to both owners and tenants of properties, the new act is expected to shield property owners from unwarranted harassment by tenants.
The new law is expected to facilitate the growth of rented properties in the state. The existing laws give less protection to owners, who are apprehensive of renting out properties as they fear harassment by tenants who do not vacate the premises.
The new act will have a provision to establish a state-level authority to regulate the rented property market.
A source privy to the development said the state government has decided to replace The Bombay (now Gujarat) Rents, Hotel and Lodging House Rates Control Act, 1947, with a new tenancy act on the lines of the model act by the government of India. “The state government is likely to adopt the model act with no or minimal changes during the coming monsoon session of the state assembly,” sources said.
The model tenancy act makes it mandatory for the landlord and tenant to sign a written agreement which specifies the rent, period of tenancy and other related terms. The state government will establish a body on the lines of RERA (Real Estate Regulation Authority) to regulate all rented property transactions.
The model act recommends that the security deposit be capped at two months’ rent for residential premises and six months’ rent for non-residential (commercial and industrial) premises. The new act will have a provision on sub-letting of properties.