India Rental Laws: Pro-landlord, Neutral or Pro-tenant?

India's landlord and tenant laws are judged by the Global Property Guide to be Pro-Tenant between landlord and tenant. Even with the application of the Lease and License Agreement system, it is still difficult for a landlord to protect their property from unwanted overstaying tenants. Even if contracts are enforceable in courts, the actual enforcement takes years or decades to accomplish.

Rents: Can landlord and tenant freely agree rents in India?

Landlords and tenants generally have the freedom to agree on rent amounts when entering into a lease agreement. Rent is usually a matter of mutual consent between the parties, and they can negotiate and set the rent based on market conditions and their preferences.

However, rent control laws exist in many states and cities, which can limit the extent to which rent can be increased or set, especially for residential properties built before certain dates. These rent control laws aim to protect tenants from excessive rent hikes and unfair evictions, but do not usually restrict the initial agreement on rent for new leases in properties not covered by these laws.

Deposits

In India, there is no uniform, nationwide legal limit on how much a landlord can charge as a security deposit from a tenant. The amount of the security deposit is usually a matter of negotiation between the landlord and tenant. In practice, the security deposit typically ranges from two to six months’ rent, depending on the city, type of property, and market conditions. In some metropolitan cities like Mumbai, Delhi, and Bangalore, landlords often ask for higher deposits (sometimes even up to 10 months' rent), though such high demands can be easily negotiated.

What rights do landlords and tenants have in India, especially as to duration of contract, and eviction?

Lease agreements can be either fixed-term or periodic. The contract duration is generally negotiable between the parties and commonly ranges from 11 months to 3 years for residential leases. Many landlords prefer 11-month leases to avoid automatic renewal clauses under some rent control laws. Longer leases are also common for commercial properties.

Eviction laws in India tend to protect tenants, especially in rent-controlled properties. Landlords must follow a legal eviction process and cannot evict tenants arbitrarily or without valid grounds recognized by law. Common grounds for eviction include non-payment of rent, subletting without permission, property damage, or the landlord’s personal use of the property.

The eviction process usually requires landlords to give formal notice and then file a suit in a rent tribunal or civil court. The tenant has the right to defend the case, and eviction orders typically require judicial approval, which can take months or years due to court backlogs.

How effective is the Indian legal system?

Court proceedings of any type should be avoided at all times. Well-defined contracts will greatly help landlords to convince tenants that they (the landlords) are likely to win the case in court. As stated above, eviction cases can last for years.

Legislation

Tenant and landlord relations are primarily governed by state-specific Rent Control Acts, not a single unified national law. Each state has its own legislation regulating rent, lease terms, eviction, and other aspects of tenancy. However, there are also general principles under central laws that apply in the absence of or alongside state laws.

Some examples:

• Maharashtra Rent Control Act, 1999

• Delhi Rent Control Act, 1958

• Tamil Nadu Buildings (Lease and Rent Control) Act, 1960

• West Bengal Premises Tenancy Act, 1997

These acts typically offer strong protections to tenants, limit rent increases, and make eviction difficult.

Brief History: Recent changes in Indian landlord and tenant law

The laws on landlords and tenants in India are archaic. The national government is encouraging local units to relax these laws to encourage investments in housing and construction. How fast India will move to abolish its old system is very much questionable. The Maharashtra Rent Act 1999, for example, is slightly more pro-landlord than the Bombay Rent Control Act 1947, but it still does not sufficiently protect landlords' rights.