Indian landlords face significant challenges as two new rules and five major amendments to home rental regulations take effect immediately across the country. These changes aim to enhance tenant protections while imposing stricter compliance requirements on property owners.
Key New Rules Effective Now
1. Mandatory Rent Agreement Registration: All rental agreements must now be registered online through the central Rent Control portal within 30 days, with e-stamping mandatory. Non-compliance attracts 2% monthly penalty on annual rent value.
2. Security Deposit Cap: Maximum security deposit limited to 2 months’ rent for all properties (previously 3-6 months in many states). Excess deposits must be refunded within 15 days or face 12% annual interest penalty.
5 Major Regulatory Changes
- Rent Increase Limit: Annual hike capped at 5% (previously 10% in many states) with 60-day advance notice mandatory via registered post/email.
- Eviction Notice Period: Extended to 3 months for all causes except non-payment; early termination clauses declared void.
- Tenant Verification Digital: Aadhaar-based instant verification mandatory; police verification eliminated for NRIs/foreign tenants.
- Maintenance Responsibility: Landlords liable for structural repairs; cosmetic maintenance shifts to tenants with clear agreement clauses.
- Dispute Resolution: Online Rent Tribunals operational within 30 days, bypassing civil courts for disputes under ₹50 lakhs.
Impact on Property Owners
| Change | Old Rule | New Rule | Penalty |
|---|---|---|---|
| Deposit Limit | 3-6 months | Max 2 months | 12% interest |
| Rent Hike | 10% annual | 5% cap | 2% monthly fine |
| Eviction | 1 month notice | 3 months | Court fines |
| Registration | Optional | Mandatory | 2% rent penalty |
These reforms align with the Model Tenancy Act 2021 implementation, targeting urban rental markets. Landlords must update agreements by March 31, 2026 to avoid penalties.