Model Tenancy Act 2025: Major Reforms Set to Transform India's Rental Housing Landscape

India's rental housing sector is poised for a significant overhaul as the New Rent Rules 2025, framed under the Model Tenancy Act, have officially come into force. According to reports, these regulations aim to establish a balanced framework that safeguards tenants from sudden rent increases and unlawful evictions while providing landlords with greater legal clarity and structured dispute resolution mechanisms.

Industry observers have noted that the updated rules seek to formalise and digitise rental arrangements across the country, marking a departure from the traditionally informal practices that have long characterised renting houses in India.

Summary of Key Regulatory Changes

Mandatory Online Rent Agreement Registration

Under the new framework, all leave and license agreements of 11 months or longer must be registered online within 60 days of execution. The process reportedly includes digital stamping and e-verification, aligning with the government's broader push towards digitising property records and tightening legal frameworks.

Non-compliance may attract penalties starting at INR 5,000, and agreements that remain unregistered could be deemed legally invalid during disputes. Experts suggest that those unfamiliar with online processes refer to guides on e-stamping for property transactions to ensure compliance.

Security Deposit Caps Offer Financial Relief

One of the most significant changes involves capping security deposits to make rental housing more accessible. Under the revised rules, landlords can request a maximum of two months' rent for residential properties and six months' rent for commercial spaces.

Previously, deposits in major metropolitan cities ranged from six to ten months' rent, placing considerable financial strain on tenants. Industry analysts have observed that this reform offers substantial relief to students, working professionals seeking accommodation, and first-time renters who often struggle with high upfront costs. Those evaluating whether renting or buying makes financial sense may find the reduced deposit burden particularly encouraging.

Rent Increase Restrictions Bring Stability

The new regulations prohibit arbitrary and frequent rent hikes, addressing a longstanding concern among tenants. As per the updated framework, rent can be revised only once every 12 months, and landlords must provide a 90-day written notice before implementing any increase.

This provision is expected to provide greater financial predictability for tenants, allowing them to plan household budgets without fear of sudden monetary demands. Housing experts have noted that such measures could help address the historical imbalance where rental agreements in India have often favoured landlords.

Eviction Now Requires Formal Legal Process

Perhaps the most protective measure for tenants is the formalisation of eviction procedures. Landlords can no longer evict tenants at their discretion. Instead, they must secure an eviction order from a designated Rent Tribunal or competent court, issue a minimum three-month advance notice, and prove valid grounds such as non-payment of rent, illegal activities, or structural misuse of the property.

Legal professionals have emphasised that this ensures tenants cannot be displaced without cause or due process, a significant shift from earlier practices. Those seeking to understand their complete rights under Indian eviction and rental laws are advised to familiarise themselves with the new provisions.

New Entry and Inspection Protocols

The updated rules mandate that landlords provide tenants with at least 24 hours' written notice before entering the premises for inspection or maintenance purposes. Entry without proper notice now constitutes a violation of tenant privacy and legal rights.

This provision addresses concerns frequently raised by renters about unannounced visits, with housing advocates noting that tenants should know their legal protections against landlord trespassing.

Maintenance Accountability Strengthened

The new framework introduces accountability measures for property upkeep. If landlords fail to conduct essential repairs within 30 days of receiving written notification, tenants are now permitted to carry out the work themselves and deduct expenses from their rent payments, provided they maintain supporting documentation.

Property management experts have observed that this provision addresses common disputes over maintenance responsibilities, including issues like painting fees and similar deductions that tenants often contest. Additionally, tenants should be aware of society shifting charges that may not be entirely legal.

Streamlined Dispute Resolution Mechanisms

To minimise delays and confusion in rent-related disputes, the government has proposed the establishment of state-level digital portals for agreement registration and tenant-landlord services. Dedicated Rent Tribunals will handle disputes related to rent arrears, eviction, deposits, and other tenancy matters.

Similar to how tenant verification processes have been digitised in cities like Gurgaon, these quicker and digitised dispute resolution processes are expected to make renting more secure and predictable for all parties involved.

Benefits for Both Tenants and Landlords

For Tenants

The reforms are expected to deliver multiple advantages for renters, including reduced upfront costs through capped deposits, legal protection from sudden evictions or rent hikes, and transparent agreements with clearly defined rights and obligations. Women seeking accommodation in metropolitan areas can refer to guides such as the Mumbai housing guide for finding safe and affordable rentals.

For Landlords

Property owners stand to benefit from legally enforceable agreements that reduce ambiguity, structured frameworks for eviction or dispute resolution, and lower chances of informal disputes or dealing with fraudulent tenants. Resources on essential renting tips for landlords can help property owners navigate the new regulatory environment effectively.

However, industry observers have noted that landlords must adapt to new digital procedures and timelines, requiring greater diligence in record-keeping and documentation. Those interested in investing in rental property in India should factor these compliance requirements into their investment decisions.

State-Level Implementation Remains Pending

While these rules have been introduced by the central government under the Model Tenancy Act, they are not automatically enforceable across the country. Housing remains a state subject under the Indian Constitution, and each state must adopt or modify its local laws to implement the changes.

Some states have already begun aligning their regulations, with Maharashtra updating its rent agreement framework and introducing new stamp duty provisions. Similarly, cities like Mumbai continue to operate parallel systems such as the pagdi tenancy system that may require specific transitional arrangements.

Citizens are advised to check with their respective state governments or local rent authorities to confirm whether the 2025 rules have been notified in their jurisdiction.

Compliance Checklist for Tenants and Landlords

Housing experts recommend the following actions to ensure compliance with the new regulations:

• Register new or existing rental agreements digitally within the stipulated 60-day window
• Ensure security deposits comply with the revised limits of two months for residential and six months for commercial properties
• Maintain proper records of all rent payments, repair notices, and correspondence
• Provide or request 90-day advance notice for any proposed change in rent
• Verify state-level implementation before assuming compliance obligations

Those planning to rent in specific cities can consult location-specific guides such as the top localities to rent in Kochi or explore the emerging rental housing innovations in Mumbai.

Conclusion

The New Rent Rules 2025 represent a long-awaited reform aimed at balancing tenant protection with landlord rights in India's fragmented rental housing market. From mandatory digital registrations and deposit caps to formal eviction protocols and rent hike limitations, the changes introduce much-needed structure to an otherwise informal sector.

Whether one is a tenant seeking residential stability or a landlord seeking legal clarity, understanding and adhering to these rules has become essential. First-time homebuyers and those familiar with RERA homebuyer rights will find parallels in the consumer protection philosophy underlying these tenancy reforms.

Frequently Asked Questions

Are the new rent rules applicable across India?
No. Since housing is a state subject, individual states must formally adopt the rules for them to be enforceable locally.

What happens if a rent agreement is not registered within 60 days?
Penalties starting at INR 5,000 may apply, and the agreement may not hold legal validity in case of disputes.

Can landlords still demand six months' deposit for residential properties?
No. Residential rental deposits have been capped at a maximum of two months' rent under the new framework.

Who handles disputes under the new regulatory framework?
Designated Rent Tribunals and competent courts will resolve tenancy disputes as per the updated provisions.

Can rent be increased twice within a single year?
No. Only one rent increase is permitted per 12-month period, and landlords must provide 90 days' prior notice.

Disclaimer: This article is intended for informational purposes only and should not be construed as legal or financial advice. The information presented is based on publicly available sources and industry reports as of the publication date. Readers are advised to verify all details independently with relevant state authorities and consult qualified legal professionals before making any decisions related to rental agreements or tenancy matters. Ghar.tv does not guarantee the accuracy, completeness, or timeliness of the information provided.