New Tenancy Act in Tamil Nadu – Here’s how it is different from the existing law

Last Updated at: March 06, 2020
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In January 2020, the Tamil Nadu assembly passed a bill to replace ordinance extending the time for registration under Tenancy Act. Accordingly, the tenants and landlords were allowed to register under the Act until the 3rd week of February.

New Tenancy Law implemented in Tamilnadu - Here's how it is different from the existing law

Last week, Chief Minister of Tamil Nadu has launched an exclusive portal www.tenancy.tn.gov.in under a new act called The Tamil Nadu Regulations of Rights and Responsibilities of Landlords and Tenants Act 2017 which aims at replacing the erstwhile Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, also known as the Rent Control Act.

Taking the line of affordable housing for all forward, the act is aimed at ensuring better access to housing opportunities, while alleviating fears of the house owners in granting tenancy rights and also establishes a better structure for enforcing rights and responsibilities of property owners and tenants.

In this post, we will list down the specifications of the Tamil Nadu Regulations of Rights and Responsibilities of Landlords and Tenants Act 2017, (TNRRRLT Act) and highlight the impact that the new act aims to create as against the old act.

Get Your New Property Verified

  1. Retrospective Operation of the Act:

The TNRRRLT Act came into effect on 22nd day of February 2019, and the act also governs and mandates those tenancy agreements executed prior to the enactment of this law. It has to be mandatorily registered with the Rent Authority within 90 days. 

  1. Mandatory registration

 While the old Rent Control Act mandated registration of the tenancy agreements exceeding 11 months or over Rs. 50,000 in value, the new law mandates all tenancy agreements to be registered with the Rent Authority, irrespective of the term and value of the tenancy. It includes both commercial and residential tenancies; including the use of premises for educational use but does not include the premises registered under the Factories Act, 1948.

  1. Who can make the application?

Application may be filed by landlord, tenant or property manager.

  1. Necessity of a written agreement and registration

As per Section 4 of the Act, all tenancies shall be effected by way of an agreement in writing. Even in respect of oral tenancies created before the commencement of the Act, the parties shall reduce the terms of the tenancy in writing within 90 days from the date of notification of the Act. Consequently, the tenancy agreement has to be registered with the Rent Authority within 90 days from the date of such execution. Moreover, registration under The Registration Act will have to be sought separately.

  1. Requirements under Stamp Act

All tenancy agreements are to be stamped as per Article 35 of the Indian Stamp Act, 1899.

  1. Registration under the Act is independent

Registration under the new Act is independent of registration required under the Indian Registration Act. The parties are still liable to register the agreements as per the Indian Registration Act in addition to registering the agreement with the Rent Authority under the new act.

  1. Calculation of aggregate rent payable

The ‘Aggregate Rent Payable’ shall be the total sum of the rent, fine, premium or advance (if any) payable under the tenancy agreement.

  1. Would the act cover leave, license, property management agreements

The Act is intended to be a comprehensive code on tenancy. License agreements being of a similar nature are also covered. Registration under this Act is mandated for tenancy/lease agreements. Thus, even if the agreement is titled ‘license’ or ‘leave & license’, ‘Property Management Agreement’, if the terms of the agreement creates any right in the immovable property, then such agreement has to be registered under this Act. The ‘terms’ of the contract will determine the nature of the agreement and not the ‘title’ given to such agreement. 

  1. Requirement of registration on renewal

The rules framed in this regard prescribe that any renewal is treated as a fresh tenancy requiring registration again. Unlike the old law, the process of registration has been made online and there is no fee for registration of the tenancy agreement, however, a nominal service charge me be levied by the portal for registration.

With the rapid growth of urbanization in the state of Tamil Nadu, the enactment of the new law makes the rights and responsibilities of both the Tenants and the Landowners concrete which is aimed at providing affordable houses to all.

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New Tenancy Act in Tamil Nadu – Here’s how it is different from the existing law

20669

Last week, Chief Minister of Tamil Nadu has launched an exclusive portal www.tenancy.tn.gov.in under a new act called The Tamil Nadu Regulations of Rights and Responsibilities of Landlords and Tenants Act 2017 which aims at replacing the erstwhile Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, also known as the Rent Control Act.

Taking the line of affordable housing for all forward, the act is aimed at ensuring better access to housing opportunities, while alleviating fears of the house owners in granting tenancy rights and also establishes a better structure for enforcing rights and responsibilities of property owners and tenants.

In this post, we will list down the specifications of the Tamil Nadu Regulations of Rights and Responsibilities of Landlords and Tenants Act 2017, (TNRRRLT Act) and highlight the impact that the new act aims to create as against the old act.

Get Your New Property Verified

  1. Retrospective Operation of the Act:

The TNRRRLT Act came into effect on 22nd day of February 2019, and the act also governs and mandates those tenancy agreements executed prior to the enactment of this law. It has to be mandatorily registered with the Rent Authority within 90 days. 

  1. Mandatory registration

 While the old Rent Control Act mandated registration of the tenancy agreements exceeding 11 months or over Rs. 50,000 in value, the new law mandates all tenancy agreements to be registered with the Rent Authority, irrespective of the term and value of the tenancy. It includes both commercial and residential tenancies; including the use of premises for educational use but does not include the premises registered under the Factories Act, 1948.

  1. Who can make the application?

Application may be filed by landlord, tenant or property manager.

  1. Necessity of a written agreement and registration

As per Section 4 of the Act, all tenancies shall be effected by way of an agreement in writing. Even in respect of oral tenancies created before the commencement of the Act, the parties shall reduce the terms of the tenancy in writing within 90 days from the date of notification of the Act. Consequently, the tenancy agreement has to be registered with the Rent Authority within 90 days from the date of such execution. Moreover, registration under The Registration Act will have to be sought separately.

  1. Requirements under Stamp Act

All tenancy agreements are to be stamped as per Article 35 of the Indian Stamp Act, 1899.

  1. Registration under the Act is independent

Registration under the new Act is independent of registration required under the Indian Registration Act. The parties are still liable to register the agreements as per the Indian Registration Act in addition to registering the agreement with the Rent Authority under the new act.

  1. Calculation of aggregate rent payable

The ‘Aggregate Rent Payable’ shall be the total sum of the rent, fine, premium or advance (if any) payable under the tenancy agreement.

  1. Would the act cover leave, license, property management agreements

The Act is intended to be a comprehensive code on tenancy. License agreements being of a similar nature are also covered. Registration under this Act is mandated for tenancy/lease agreements. Thus, even if the agreement is titled ‘license’ or ‘leave & license’, ‘Property Management Agreement’, if the terms of the agreement creates any right in the immovable property, then such agreement has to be registered under this Act. The ‘terms’ of the contract will determine the nature of the agreement and not the ‘title’ given to such agreement. 

  1. Requirement of registration on renewal

The rules framed in this regard prescribe that any renewal is treated as a fresh tenancy requiring registration again. Unlike the old law, the process of registration has been made online and there is no fee for registration of the tenancy agreement, however, a nominal service charge me be levied by the portal for registration.

With the rapid growth of urbanization in the state of Tamil Nadu, the enactment of the new law makes the rights and responsibilities of both the Tenants and the Landowners concrete which is aimed at providing affordable houses to all.

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Avani Mishra is a graduate in law from the National Law Institute University, Bhopal. She qualified the Company Secretary course with an All India Rank 1 and is a recipient of the President’s Gold Medal for her academic distinctions. She also holds a B.Com degree with a specialization in Corporate Affairs and Administration.