Tamil Nadu is one of the most urbanized states in India with an urban population of over 3.5 crores, which is almost half of the total population. The rapid pace of urbanization in the state has resulted in a lack of availability of affordable housing in urban areas, including the majority of rental housing.

Rental housing had been a long standing challenge in Tamil Nadu with an immediate need for regulation. In order to balance and regulate the rights of owners and tenants, the Tamil Nadu government has implemented an exclusive Tenancy Act that aims to replace the former Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, also commonly referred to as the Rent Control Act.

According to the new Tenancy Act called The Tamil Nadu Regulations of Rights and Responsibilities of Landlords and Tenants (NRRRL) Act, the registration of all rental/leave and license and property management agreements are mandatory. This Act also applies to all existing agreements as well. Largely, it is aimed to ensure that people have better access to housing opportunities, while taking the edge off of the homeowners in granting tenancy rights.

Not only does the new tenancy Act establish a better structure at enforcing the rights and responsibilities of property owners and tenants, it also legitimizes the whole transaction and agreement. Here are the top 5 things you need to know about the Tamil Nadu Tenancy Act and the impact it aims to create:

  • According to the old Rent Control Act, only those tenancy agreements that exceeded 11 months or Rs. 50,000 in value were mandated to be registered. However, TNRRRLT mandates all tenancy agreements to be registered with the Rent Authority, regardless of the term and value of the tenancy.
  • The model tenancy act also governs and mandates those agreements that were executed prior to the enactment of TNRRRLT on 22 February, 2019. The tenancy agreements need to be mandatorily registered with the Rent Authority within 90 days.
  • The mandatory registration applies to both commercial and residential tenancies, including renewals, which must be treated as a fresh tenancy, thereby requiring registration again.
  • The registration application can be filed by the landlord, tenant or the property manager.
  • As per the new Act, all tenancies will be effected only after the agreement has been made in writing and stamped, as per Article 35 of the Indian Stamp Act, 1899.

The Tamil Nadu Tenancy Act has been conceptualized as a comprehensive code for tenancy. Its enactment regulates rights and responsibilities of both the property owners and tenants concrete, acting as a legal platform to resolve any disputes as well.