New Rental Policy Brings Clarity for Landlords and Tenants..

For many years, India did not have a clear policy for rental housing. Because of this, disputes between landlords and tenants were common. To address this problem, the Central Government is introducing major reforms in the rental housing sector through the Model Tenancy Act. The aim is to simplify rental agreements, increase transparency, and reduce disputes between property owners and tenants. The Ministry of Housing and Urban Affairs has already circulated the guidelines to states.

Online Registration of Rental Agreements
According to the proposed Model Tenancy Act 2025, all rental agreements for residential and commercial properties must be registered online with digital stamping within 60 days of signing. Earlier, many states allowed handwritten agreements or simple stamp paper contracts, which created opportunities for fraud and illegal occupation. Digital registration will help reduce such problems.

Security Deposit and Tenant Protection Rules
In many major Indian cities such as Delhi, Mumbai and Bengaluru, tenants are often required to pay a security deposit equivalent to eight to eleven months’ rent, which places a heavy financial burden on renters. The proposed rent law seeks to address this issue by setting clear limits on deposits. Under the proposal, the maximum security deposit for residential properties will be limited to two months’ rent, while for commercial properties it will be capped at six months’ rent.

The law also introduces clearer rules for rent increases and eviction. Rent can be increased only once a year, and landlords must give at least 90 days’ written notice before raising the rent. Tenants cannot be forced to vacate a property without an order from a Rent Tribunal, ensuring greater protection against sudden eviction. Additionally, landlords must give 24 hours’ prior notice before entering a rented property. Any attempt to harass tenants, such as cutting electricity or water supply or issuing threats, will be treated as a punishable offence under the law.