Published On:
December 7, 2025
Updated On:
December 7, 2025
The Model Tenancy Act (MTA), 2021, revolutionizes renting in India by making digital registration of agreements mandatory within 60 days. It caps the residential security deposit at two months' rent, mandates a 24-hour written notice for landlord entry, and limits rent hikes to once every 12 months with 90 days' notice. Eviction requires a Rent Tribunal order based on specific grounds, while tenant overstay is penalized by up to four times the monthly rent.
The rental housing sector in India has long been characterized by informality, unclear rules, and a heavy imbalance of power. The introduction of regulations based on the central government’s Model Tenancy Act (MTA), 2021, aims to usher in an era of transparency, legal certainty, and structured protection for both tenants and landlords. This new framework addresses long-standing pain points, from exorbitant upfront costs to unwarranted intrusions on privacy.
One of the foundational changes is the mandate for formalizing all rental relationships. The MTA, 2021 requires that every tenancy agreement must be executed in a written format, be digitally stamped, and then be registered online with the newly constituted District Rent Authority. Landlord and tenant must jointly report this agreement within a strict deadline of two months (60 days) from the date of execution. This is a critical legal step, as non-compliance may lead to penalties starting at ₹5,000 and can render the contract legally weak, a hidden risk that exposes both parties to future disputes. This move is designed to draw India’s vast informal rental market onto a transparent, trackable, and official platform.
For urban migrants and young professionals, the largest financial obstacle has historically been the massive security deposit requirement. In major metropolitan areas like Mumbai and Bengaluru, landlords traditionally demanded the equivalent of 6 to 12 months’ rent, creating significant financial entry barriers. The new law introduces a strict limit: the security deposit for residential properties cannot exceed two months’ rent. For non-residential or commercial premises, the cap is set higher, at six months’ rent. Furthermore, the Act explicitly mandates that the landlord must refund the security deposit in full on the day the tenant hands over vacant possession, after making due deductions for only legitimate dues.
For the first time, tenant privacy is formally recognized and protected. The new rules stipulate that a landlord, or their appointed property manager, must provide the tenant with at least 24-hour written or electronic notice prior to entering the premises. This right is fundamental and restricts entry for purposes like inspection, repair, or showing the property. Crucially, entry is explicitly prohibited before sunrise or after sunset. The only exception to the notice rule is in cases of grave emergent situations such as a fire, flood, cyclone, or other natural calamity. Moreover, landlords are legally prohibited from forcibly removing a tenant or cutting off essential supplies, such as electricity or water, a violation that is now legally punishable.
The Act brings clarity to tenancy termination and rent increases. Landlords can only revise the rent once within a 12-month period and must issue a written notice to the tenant 90 days in advance of the intended increase. Eviction procedures have also been formalized to protect against arbitrary removal. A landlord must now apply to the Rent Tribunal to seek an eviction order, which can only be granted on specific, defined grounds, such as: non-payment of rent for two consecutive months, misuse of the property, or unauthorized structural alterations.
The law also introduces harsh penalties for non-compliant tenants. If a tenant fails to vacate the premises after the lease term expires or is legally terminated, they become liable to pay an enhanced rent. This penalty is set at twice the monthly rent for the first two months, escalating to four times the monthly rent for every month thereafter until they vacate. This provision is designed to expedite the vacation process and protect the landlord's property rights.
To ensure timely justice, the new framework establishes a three-tier adjudication mechanism, including a Rent Authority and a Rent Tribunal. This new system is mandated to resolve disputes, including eviction applications and rent default cases, within a strict timeline, typically aiming for completion within 60 days.
The Act clearly delineates responsibilities for property upkeep. Landlords are legally required to handle structural repairs, electrical wiring, and plumbing replacements. Tenants are responsible for minor repairs and day-to-day maintenance, such as fixing taps, switches, and kitchen fixtures. Should the landlord fail to execute essential structural repairs after receiving a 30-day written notice, the tenant is legally entitled to carry out the repairs themselves and deduct the cost from the rent, provided they submit proper bills as proof.
