Plans of the Uttar Pradesh government to introduce a tenancy law have firmed up, with the state Cabinet approving the Uttar Pradesh Regulation of Urban Premises Tenancy (second) Ordinance, 2021, on April 5, 2021. The new law will replace the UP Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972.
Recall here that the union cabinet, on June 2, 3021, approved the draft model tenancy law and the same would act as the model for states to follow, while creating their own rental laws.
The state government, on January 8, 2021, promulgated the tenancy ordinance, with an aim to safeguard the interests of landlords, as well as tenants. The law, which is expected to receive the approval of governor Anandiben Patel soon, is likely to bring down tenant-landlord disputes, especially in the high-intensity rental markets of Noida, Greater Noida and Ghaziabad, by clearly specifying the duties and responsibilities of the transacting parties.
“Once this law is in place, there will be much more transparency in the agreement between the tenant and landlord and therefore, there will be no scope for petty disputes or at least, there will be much more clarity on several issues,” a state government official was quoted as saying.
Rent agreements mandatory
The Uttar Pradesh Regulation of Urban Premises Tenancy Ordinance, 2021, which has been cleared by the state cabinet in a meeting headed by chief minister Yogi Adityanath, makes rent agreements mandatory, for tenancy agreements for all sorts of properties. As provided in the central government’s draft Model Tenancy Law, 2019, the UP law also states that the provisions of the rent agreements will be applicable on the successor of the tenant, as well as the landlord, in case either or both of them pass away. Whether they want to increase the duration of the tenancy and renew the rent agreement is also a decision both parties will take jointly.
The draft law makes it mandatory for landlords and tenants to execute a written rent agreement, before embarking on a rental arrangement. The landlord will also be obliged to report to the rent authority about the rent arrangement, within two months of the start of the tenancy. Within three months, the landlord and the tenants will also have to inform the rent authority about the written rent agreement.
UP rent authority
The law also speaks of a rental authority, with which all rent agreements must be registered, to have legal validity. For rent agreements that are over a year, the authority will have to issue a unique identification number after receiving the agreement within a week and upload the details of the agreement and the tenant on its official portal. This will not hold true, if the duration of the tenancy is less than 12 months.
The rental authority and appellate tribunal will have to dispose of disputes within 60 days of receiving an application in this regard.
Cap on rent hike
The new ordinance also puts a cap on the annual rent increase in UP. While a landlord can increase rent only by 5% annually in case of residential property, he can implement a hike of up to 7% in case of commercial property. The ordinance also states that a tenant could be evicted from the property, if he fails to pay the rent for two months in a row.
Unlike the central version of the model tenancy law, the UP government’s ordinance also provides for the regulation of rents of existing tenancies.