Model tenancy law may prompt builders to construct about 50 pc of homes for rent purpose: NAREDCO

"The draft model tenancy law protects all stakeholders, including landowners and tenants. This will promote rental housing in a big way," NAREDCO

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Published : Jul 29, 2019, 5:14 PM IST

New Delhi: Realtors' body NAREDCO on Monday said the proposed model tenancy law, if implemented by all states, will promote rental housing in a big way and it expected builders to construct at least 50 per cent of its total inventories for rent purpose in the next five years.

The Union housing and urban affairs ministry has put the draft of 'The Model Tenancy Act, 2019' in public for consultation. The announcement in this regard was made in this year's Budget.

"The draft model tenancy law protects all stakeholders, including landowners and tenants. This will promote rental housing in a big way," NAREDCO

President Niranjan Hiranandani told reporters here.

The association, he said, is studying the draft law and will submit its recommendations.

Hiranandani hoped that all states will frame their own law based on this model law prepared by the Centre.

"I expect that developers will put 50 per cent of their products under rental housing," he added.

NAREDCO Chairman Rajeev Talwar said the recent announcement in the Union Budget concerning the promotion of the rental housing sector promises new growth areas for developers.

The association's Vice-Chairman Parveen Jain emphasised on faster adoption of modern construction technologies. "This will help in faster deliveries and will eventually help homebuyers."

Earlier this month, the Centre proposed a 'Model Tenancy Law', under which the landowners will have to notice in writing three months before revising rent, a move aimed at regulating renting of premises in the country.

The proposed law also advocates appointing a district collector as rent authority and heavy penalty on tenants for overstaying. According to it, tenants overstaying will have to pay double the rent for two times and four times thereafter.

Expressing concern over the liquidity situation of developers, NAREDCO said there is a need to find some alternative funding options for builders. The ban on subvention scheme will affect the funding in the sector.

The sector is facing major challenges on liquidity squeeze, ease of doing business, land acquisition, lack of skilled workforce, and higher development rates, it added.

The association announced its 15th annual edition of the national convention, themed on 'Housing for All 2022 – Real Estate Inflection Point: Readying for Future', will be held on August 19 where these issues will be discussed.

The Union housing and urban affairs ministry has put the draft of 'The Model Tenancy Act, 2019' in public for consultation. The announcement in this regard was made in this year's Budget.

"The draft model tenancy law protects all stakeholders, including landowners and tenants. This will promote rental housing in a big way," NAREDCO

President Niranjan Hiranandani told reporters here.

The association, he said, is studying the draft law and will submit its recommendations.

Hiranandani hoped that all states will frame their own law based on this model law prepared by the Centre.

"I expect that developers will put 50 per cent of their products under rental housing," he added.

NAREDCO Chairman Rajeev Talwar said the recent announcement in the Union Budget concerning the promotion of the rental housing sector promises new growth areas for developers.

The association's Vice-Chairman Parveen Jain emphasised on faster adoption of modern construction technologies. "This will help in faster deliveries and will eventually help homebuyers."

The sector is facing major challenges on liquidity squeeze, ease of doing business, land acquisition, lack of skilled workforce, and higher development rates, it added.

ZCZC
PRI GEN NAT
.NEWDEL PAR15
RS-DEPOSITBILL
RS members support bill to regulate unregulated deposits
schemes
New Delhi, July 29 (PTI) Cutting across party lines,
members in the Rajya Sabha on Monday supported a bill that
seeks to regulate unregulated deposit schemes in the country
and protect the money of poor depositors.
CPI-M leader Elamaram Karim, however, moved a resolution
opposing the ordinance route taken by the government to bring
this bill just before Lok Sabha polls.
Asserting that he does not question the merit of the
bill, Karim said it was not a good practice to bypass
Parliamentary procedure and bring an ordinance. Every bill
should be debated in Parliament.
The Banning of Unregulated Deposit Scheme Bill, 2019 has
already been passed in the Lok Sabha.
Later, Minister of State for Finance Anurag Thakur moved
the bill for discussion in the Upper House and members from
various parties welcomed it and offered suggestions as well.
Participating in the debate, Suresh Prabhu (BJP) said it
is a comprehensive bill which is a necessity for the economy
as this will help mobilise savings in regulated environment.
Prabhu, however, suggested the Finance Minister look at
Clause 12 in Chapter 5 of the bill "very seriously" to avoid
dichotomy in view of amendments being brought to section 53 of
the IBC law.
Noting that a big challenge before the country was to look
at ways to mobilise savings, the BJP leader said, "China has
50 per cent saving rate in a USD 12.4 trillion economy. It has
USD 6.2 trillion savings that could be brought back into
investment. We have to increase our savings rate."
Savings can be improved if there are intermediaries like
NBFCs. But intermediaries need to be regulated. And also,
there should be a fine trade off between those who mobilise
deposit and protect the interest of depositors, he added.
AITC member Derek O Brien supported the bill, saying this
is the first bill brought for passage in the House after being
scrutinised by a parliamentary panel.
"None of 14 bills went through parliamentary scrutiny,"
he said.
Brien said it is a water-tight bill that aims to curb
fraudulent practices in ponzi schemes and chit funds as he
mentioned fraud cases like Pearl Chit Fund of Rs 49,000 crore
that affected 5,500 crore depositors and Gujarat's Oscar Chit
Fund that had deposit from 1.2 lakh people.
T Subbarami Reddy (Cong) supported the bill stressing
that the poor should be protected from unregulated deposit
schemes and norms should be made more stringent.
Currently, the Non-Banking Finance Companies (NBFCs) are
in a bad shape because of 2-3 unscrupulous companies and the
government should take steps to address the problems, he said.
Ramnath Thakur (JD-U), Vishambhar Prasad Nishad (SP) and
Prashanta Nanda (BJD) also supported the bill.
Nanda supported the bill, saying such a comprehensive law
is the need of the hour. He said it could hit real estate
developers who are getting money from such unregulated
schemes.
Banda Prakash (TRS) said there is a network of people
taking deposits using commission agents by offering high
interest rates and such funds are invested in real estate.
He lauded the Finance Minister for bringing this bill
that will help safeguard interests of people, especially the
poor, as there is no law to regulate such ponzi schemes.
He called for a regulatory mechanism and collection of
data by the Finance Ministry and states on how much money is
being taken through such deposit schemes. He said there is no
authentic study to measure how much poor people are investing
in these schemes.
K Soma Prasad (CPI-M) said it is high time such a law be
brought that could protect investors and put an end to such
schemes. He said the law could help tackle illicit deposit
companies and regulate them. The CPI-M member noted that most
of the time the poor are being cheated through such schemes.
He, however, expressed apprehensions that the law is
harsh and could provide harsh treatment to people in villages.
"There is ambiguity in the law and there must be clarity
for acceptance of loans for personal exigencies," he said,
adding the government should ensure maximum publicity to the
law.
Manoj Kumar Jha (RJD) supported the bill but had a word
of caution, saying bureaucracy should not be given so much
power that might create a state within a state, that might
create problems later. He called for action on such deposits
at the beginning itself.
P Wilson (DMK) said Tamil Nadu already has a law to
protect interests of depositors.
He also called for steps to ensure the supremacy of the
legislature and reclaim the space, since the judiciary and the
executive were transgressing. He also called for Bharat Ratan
to DMK leader Karunanidhi. PTI LUX SKC
DV
DV
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Model tenancy law may prompt builders to construct about 50 pc of homes for rent purpose: NAREDCO

"The draft model tenancy law protects all stakeholders, including landowners and tenants. This will promote rental housing in a big way," NAREDCO

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