Rental rules govern the agreements made by landlords and tenants in India. The 2025 Rules, effective March 1, aim to standardize the renting procedures. These changes, under the Model Tenancy Act, advocate transparency in the field. Hence, they set up an equitable system for all.
Purpose of 2025 Rules
The new rules are aimed at curbing an increase of disputes regarding rentals all over the country. They insist upon clear efficacious agreements and work toward the reduction of litigation. The rules are applicable in all states and are aimed at streamlining procedures. Digital means are expected to ensure higher efficacy and overall accessibility.
Written Agreement Must
All rental agreements must be in writing and registered by March 2025. Verbal contracts will not be recognized anymore. They must specify the rent, tenure, and maintenance responsibilities. This would avoid possible ambiguities between the parties.
Regulated Rent Increases
A landlord can increase rent once per year, but with a prior notice of two months. For residential purposes, the rent increase is capped at 7%. Tenants under commercial properties are eligible for a limit of 10%. These limits are meant to prevent sudden economic shock to tenants.
Security Deposit Caps
For residences, the law caps security deposits at two months’ rent. Commercial leases allow security deposits as high as six months’ rent. Refund must be sent within 15 days after vacating the premises. This ensures genuine financial dealings.
Streamlined Eviction Process
Eviction notices have to be of 30 days for default such as non-payment. Valid reasons have to be produced for the eviction. Rent Courts have jurisdiction to entertain and decide disputes within 60 days. This speeds up fair remedy.
Mandatory Digital Payments
Rent payment must be made digitally, either by UPI or bank transfer. Cash is discouraged for transparency. The landlord must issue digitally generated receipts for transactions. It minimizes payment-related disputes.
| Aspect | Pre-2025 Rules | 2025 Rules |
|---|---|---|
| Agreement Type | Verbal or written | Written, registered |
| Rent Increase Cap | No fixed limit | 7% residential, 10% commercial |
| Security Deposit | Variable | 2 months (residential) |
| Eviction Notice | Varies by state | 30 days, valid reason |
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