A Guide to Legal Rights for Tenants in India

Renting out a property comes with a lot of responsibility, especially when it comes to understanding tenant rights. In India, tenants are protected by various laws that ensure fair treatment and prevent exploitation. 

As a landlord, it's important to familiarise yourself with these legal rights to avoid potential disputes and maintain a healthy relationship with tenants. Knowing the legal framework can help you manage your property more efficiently while respecting your tenants' rights. 

One of the primary laws regulating rental agreements in India is the Rent Control Act of 1948, which oversees rent control and safeguards the rights of both landlords and tenants.

In this blog, we’ll walk you through the basic legal rights of tenants in India, from rent agreements to the right to a safe and secure living environment.

Introduction to the Rent Control Act

The Rent Control Act, introduced by the Indian government in 1948, is a law that sets rules for renting out properties in India. It was designed to ensure that both landlords and tenants are treated fairly. 

The Act regulates rent rates, prevents unjust evictions, and ensures landlords receive a reasonable return on their property.

In India, these rights are governed by state-specific Rent Control Acts. While the core principles remain consistent across the country, each state makes slight adjustments to the Act to fit local conditions.

Understanding the Rent Control Act is essential for landlords to avoid legal disputes and ensure they operate within the law while protecting their property rights.

What are the Legal Rights of Tenants in India?

Below are some of the essential rights that help protect tenants in India and ensure they have a fair rental experience:

1. Rent Deed

One of the most important legal rights for tenants in India is the right to have a proper rent deed in place. A rent deed, also known as a rental agreement, is a legal document that outlines the terms and conditions of the rental arrangement between the landlord and tenant. 

It typically includes details like the rent amount, security deposit, duration of the tenancy, and maintenance responsibilities. Here are the key aspects to consider for a valid rental agreement:

• Written agreement: A written rental agreement is mandatory. Oral agreements do not hold up in legal disputes.

• Signatures and date: Both the tenant and the landlord must sign the agreement, and it should be dated accordingly.

• Stamped and registered: For the agreement to be legally enforceable, it must be properly stamped and registered as per the state’s requirements.

The Rent Control Act forms the legal foundation for rental agreements. Landlords and tenants must ensure that their agreements comply with these state-specific laws.

If any party fails to uphold the terms of the rental agreement, the other party has the right to take legal action. Tenants, for example, can file a complaint in a small causes court if their landlord violates the agreement. 

2. Safe and Habitable Residence

As a landlord, it’s your legal responsibility to provide a safe and habitable home for your tenants. Before moving in, tenants can check if all safety measures are in place and can request to make necessary repairs, such as fixing leaking pipes or repairing appliances like air conditioners or heaters. 

Tenants may also ask for the property to be painted or maintained before shifting in. During the tenancy, if any issues arise, tenants can call upon the landlord to handle repairs promptly so that the property remains clean and well-maintained. 

It is the landlord’s legal responsibility to provide a safe living environment, and neglecting these duties can result in legal consequences.

3. Privacy

Tenants have the right to privacy in their rented homes. While the property belongs to the landlord, once rented, the landlord cannot enter the premises without proper notice. 

Whether it is for a routine check, a repair visit, or any other reason, the landlord must inform the tenants, be they a family or individuals, at least 24 hours in advance. However, the landlord can enter for genuine emergencies.

This ensures that tenants feel secure and that their privacy is respected during their stay.

4. Access to Essential Services

Landlords are responsible for ensuring that essential services, such as water and electricity, are continuously available throughout the tenancy. Cutting off these basic services is not permitted even if the tenant delays rent payments.

If a landlord attempts to cut off these services, tenants have legal recourse through the Rent Control Act. The tenant can approach the court, which will take action to restore the services and hold the landlord accountable.

The proposed Model Tenancy Act further strengthens this by ensuring that landlords cannot stop vital services like power and water during disputes.

5. Protection Against Unlawful Eviction

In India, tenants are protected from unlawful eviction, meaning landlords must have valid legal grounds to evict a tenant. The Rent Control Act lays down specific rules for eviction. Some of the grounds on which landlords can evict tenants include:

• Non-payment of rent: If the tenant fails to pay rent, the landlord can initiate eviction but must first provide a notice period.

• Subletting without consent: Subletting the property without the landlord’s approval can be grounds for eviction.

• Causing damage or nuisance: Tenants who damage the property or disrupt peace may face eviction after proper notice.

• Landlord’s personal use: In some states, landlords may evict tenants if they need the property for personal use or renovations, provided they give sufficient notice.

Landlords must follow a fair and legal process when evicting a tenant, including providing a formal notice. The specific rules for eviction can vary by state. In some states, landlords need to obtain a court order before eviction. In others, tenants cannot be evicted if they agree to reasonable rent increases.

6. Security Deposits

Most landlords request a security deposit before a tenant moves in, typically equal to three months’ rent, though the exact amount may vary depending on state laws. 

As per the Model Tenancy Act, the security deposit cannot exceed three times the monthly rent. This deposit serves as a safeguard for the landlord and can be used to cover any property damage or unpaid dues.

At the end of the tenancy, the landlord must return the security deposit. However, deductions can be made for damages beyond normal wear and tear, or for any unpaid rent or other agreed-upon expenses. 

Also, If the tenant causes damage due to carelessness, the cost of repairs can be deducted from the security deposit. Should the repairs exceed the deposit, the tenant must reimburse the landlord for the difference within one month of notification.

Note: As of now, only four states—Tamil Nadu, Andhra Pradesh, Uttar Pradesh, and Assam—have updated their tenancy laws following the Model Tenancy Law introduced by the Union government in 2021.

7. Receipt for Payments

Landlords are required to provide tenants with rent receipts for all payments made. These receipts should include details like the amount paid, the date of payment, and the landlord’s signature. 

The mode of payment (cash, check, bank transfer, etc.) can be agreed upon during the rental agreement. This ensures a clear record of financial transactions and helps avoid any disputes regarding rent or other charges.

8. Property Maintenance

Property maintenance is a shared responsibility between the landlord and the tenant. Tenants are required to keep the property in good condition but cannot make any structural changes without the landlord’s permission. Similarly, landlords cannot carry out renovations without the tenant’s consent. 

If a tenant fails to maintain the property, the cost can be deducted from their security deposit. On the other hand, if the landlord neglects necessary maintenance, the tenant may deduct the repair costs from the rent. 

In some cases, tenants may be asked to handle repairs at their own expense and be reimbursed later by the landlord. The rental agreement should clearly outline which party is responsible for specific maintenance tasks.

9. Tenant's Right to End Lease

Tenants have the right to end the lease and move out if they believe the landlord has violated any terms of the rental agreement. This allows tenants to protect themselves if the landlord fails to meet their obligations.

10. Transfer of Tenant Rights to Legal Heirs

In the event of a tenant’s death, their legal heirs, such as the spouse, children, or parents, have the right to continue living in the rented property, provided they were living with the tenant before their passing. 

However, if none of the legal heirs were living with the tenant at the time of death, they do not have the right to inherit the tenancy. The transfer of tenant rights also depends on the specific laws and regulations governing tenancy in a particular state or union territory. 

These laws ensure the family's protection, allowing them to stay in the property under the same rental terms as the original tenant.

11. Rent and Rental Increases

The rent for a property is decided through mutual agreement between the landlord and the tenant. Tenants have a right to fair rent, which should be in line with the market rates for similar properties in the area. 

The rent for a property should be based on the property's value, typically between 8% to 10% of its total worth, including construction and fixtures. If a tenant feels that the rent is unreasonably high compared to the property's value, they have the right to approach the court for redressal. 

When it comes to rent increases, there is no strict law capping the amount, allowing landlords to raise the rent at their discretion. Typically, rent increases range from 5% to 8% annually.

To avoid unexpected jumps, it’s a good idea to include the conditions and limits for rent increases in the rental agreement.

Additionally, the agreed rent must comply with the Rent Control Act of the specific state. For example, under The Maharashtra Rent Control Act of 1999, landlords can raise the rent by 4% annually. For repairs or improvements, the rent can increase by up to 15% of the repair costs, and structural repairs allow for a rent increase of up to 25%.

12. Notice Period Before Asking to Vacate

Landlords are required to provide tenants with a notice period before asking them to vacate the property. Typically, this notice period is one month, but it can be adjusted or waived if both the landlord and tenant mutually agree.

13. Refusal of Rent Agreement Renewal

Rent agreements are usually for 11 months and may be renewed as needed. Rent increases are common when renewing the agreement, but tenants are under no obligation to accept these terms.

If a tenant disagrees with the proposed rent hike, they have the right to refuse the renewal and give the required notice to vacate the property.

Note: It’s important to note that while these are the general legal rights of tenants in India, the specific rules and regulations can vary from state to state. Landlords and tenants should always refer to the laws applicable in their state to ensure they comply with local regulations. 

Non-Applicability of the Rent Control Act

There are certain situations where the Rent Control Act does not apply:

• Property rented to companies: If the property is let out to a private or public limited company with a paid-up share capital of Rs 1 crore or more.

• Property rented to public sector undertakings: When the property is rented or sublet to public sector undertakings, banks, or corporations established under any state or central law.

• Property rented to international entities: If the property is rented out to foreign companies, international missions, or agencies.

In these cases, the usual protections and rules of the Rent Control Act do not govern the rental agreement, and different terms may apply based on the specific lease agreement.

Acts and Laws Governing Tenants and Landlords

Several laws and regulations in India define the rights and responsibilities of both tenants and landlords, ensuring a fair and balanced rental market. Here are the key acts that govern the relationship between tenants and landlords:

1. The Rent Control Act (1948)

The Rent Control Act is a state-specific law that provides the foundation for rental agreements. It governs rent regulation, eviction procedures, and the rights and responsibilities of both landlords and tenants.

2. The Transfer of Property Act (1882)

This Act focuses on the details of leasing. It explains how leases are created, terminated, and what obligations both landlords and tenants must follow. It also lays down how rent is calculated and managed, ensuring clarity in leasing agreements.

3. The Model Tenancy Act (2021)

Proposed by the central government to balance the rights of tenants and landlords, this Act lays down guidelines for fair rental agreements, security deposits, maintenance responsibilities, and dispute resolution. It aims to replace outdated rent control laws.

4. State-Specific Tenancy Laws

In addition to national laws, certain states have their own tenancy laws, like Maharashtra, Karnataka and Delhi, which include specific regulations on rent control and eviction procedures. These laws provide additional protections and guidelines tailored to the rental needs of each state.

Simplify Property Management with Crib

Managing tenants, handling rental agreements, and keeping up with property maintenance can be tough for landlords. That’s where Crib comes in. Crib is a property management software that simplifies every part of your rental business.

Here’s how Crib can help you:

• Automated Rent Reminders: Get paid on time by sending automatic reminders to tenants.

• Digital Agreements: Create, sign, and store rental agreements without any paperwork.

• Payment Tracking: Track all rent payments and security deposits easily.

• Maintenance Management: Handle tenant complaints and property repairs efficiently.

With Crib, you can stay organised, avoid unnecessary disputes, and keep your tenants happy.

Conclusion

Understanding the legal rights of tenants and the responsibilities of landlords is essential for maintaining a healthy and fair rental relationship. Laws such as the Rent Control Act, the Transfer of Property Act, and the Model Tenancy Act provide a clear framework that ensures both parties are protected and treated fairly.

By adhering to these laws, landlords can avoid potential disputes and create a smooth rental experience for their tenants. Staying informed and compliant not only protects property rights but also builds trust and mutual respect between landlords and tenants.

To manage your rental properties more efficiently and stay compliant with regulations, Crib offers landlords a powerful, user-friendly platform.

Take the hassle out of rentals. Get started with Crib – book a demo today or chat with us on WhatsApp!