The model tenancy law can induce developers to build about 50% of houses for rent purpose: NAREDCO.

By Abhay Shah, Realty Quarter

Realtors’ body, NAREDCO (National Real Estate Development Council), stated that the proposed model tenancy legislation would greatly encourage rental housing if enforced in all states, and anticipated builders to build at least 50% of their total rental inventory in the next five years.

A draft of “The Model Tenancy Act 2019” was published by the Union housing and urban affairs ministry for consultation. This was announced in the budget of this year. NAREDCO President Niranjan Hiranandani said the reporters: “A draft model tenancy law protects all stakeholder groups including landowners and tenants to encourage rental housing on an enormous scale.” Further, He said that the association is studying the draft law and will make its suggestions.

Hiranandani expected that all states would frame their own law based on this Centre’s model law. “I expect developers to put 50% of their products in rental housing,” he added.

NAREDCO Chairman Rajeev Talwar said that the latest announcement on promoting the rental housing industry in the Union budget promises fresh growth zones for developers.

Vice-President Parveen Jain of the association emphasized the quicker implementation of contemporary building techniques. “This will assist deliveries quicker and will help homebuyers eventually.” Recently, the Center proposed a ‘Model Tenancy Law,’ which requires landowners to notify, in writing, three months before revising the rent, a move to regulate the renting of the country’s property.

In addition, the proposed law calls for the nomination of a district collector as the rent authority, and for the payment of a large penalty by the tenants for overstaying in the property. It states that tenants overstaying will have to pay twice and four times the rent thereafter.

Expressing concern about the developer’s liquidity, NAREDCO said some financing alternatives are necessary for builders. The prohibition of the subvention scheme will impact the sector’s funding.

He added that the industry is facing significant difficulties in the area of a liquidity squeeze, business ease, land acquisition, shortage of skilled workers and higher development rates.

The association announced its 15th annual national convention on the theme of  ‘Housing for All 2022 – Real Estate Inflection Point: Readying for Future,’ which will be held on August 19 to discuss these problems.