The act will also enable institutionalisation of rental housing. (Representational)
The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the Model Tenancy Act for circulation to all State/Union Territories for adaptation by way of enacting fresh legislation or amending existing rental laws suitably.
According to an official statement, the act will help overhaul the legal framework with respect to rental housing across the country and the move will boost real estate growth.
"The Model Tenancy Act aims at creating a vibrant, sustainable and inclusive rental housing market in the country. It will enable creation of adequate rental housing stock for all the income groups thereby addressing the issue of homelessness," the government said.
The act will also enable institutionalisation of rental housing by gradually shifting it towards the formal market.
It will facilitate the unlocking of vacant houses for rental housing purposes. It is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage, the statement added.
Meanwhile, Union Minister for Housing and Urban Affairs Hardeep Singh Puri said: "Model Tenancy Act provides model for urban and rural properties and template for residential and commercial properties. Will apply to future transactions and take people from informal to specific contract arrangement between landlord and tenant."