India’s rental system is finally getting a huge clean-up, and the impact will be felt most in places like Bengaluru and Mumbai, where tenants have long struggled with sky-high security deposits. The new Home Rent Rules 2025 bring in the structure and transparency that tenants and landlords had been waiting for. These rules build on the earlier Model Tenancy Act and are meant to reduce big upfront payments and bring everyone under one clear format.
Security deposits capped at two months’ rent
This is the biggest relief for renters in Mumbai and Bengaluru, where deposits once felt like paying a year’s rent in advance.
New rule suggests that landlords can ask for a maximum of two months’ rent as a deposit for residential properties.
Earlier, tenants in metros paid 6–10 months’ rent upfront. That practice is now considered illegal. The move finally brings India closer to global standards and eases financial pressure on renters.
Rent Changes 2025: All agreements must be registered
For years, many people in India, especially in cities, took houses on rent with just a verbal promise or a handwritten paper. The new rules put an end to that.
Registration is mandatory
- Every rental agreement has to be registered within two months. People can do this online or at the local registrar.
- Fine for skipping registration: If someone doesn’t register the agreement, they’ll have to pay a ₹5,000 penalty. This rule is meant to stop unregistered, informal deals that often lead to fights later.
- To cut down on last-minute twists in contracts, the government has introduced a standard rental agreement template. With this, neither party can slip in strange or unfair clauses at the eleventh hour.
Rent hikes will be predictable now
Sudden rent jumps or confusing payment demands are no longer allowed under the new rule. This includes only one hike per year, a 90-day notice before any increase and digital payments are mandatory for rent above ₹5,000. TDS applies if rent exceeds ₹50,000.
To simply put-
- Landlords cannot increase rent multiple times. Only one hike per year is permitted.
- Before increasing rent, landlords must give a three-month notice. So no more surprise messages saying “Rent going up from next week”.
- If the rent is above ₹5,000 per month, tenants must pay digitally, via UPI, bank transfer, etc. Cash payments are being slowly eliminated to avoid confusion and to keep things clean and traceable.
- If a house rents for more than ₹50,000 a month, TDS will be deducted. This will bring expensive rental homes under clearer tax rules.
Faster dispute resolution
Rental fights earlier dragged on for years. Now:
- Special Rent Courts and Tribunals will handle such matters
- Cases must be settled within 60 days
This is a huge upgrade from the earlier reality, where eviction issues, deposit fights, and maintenance-related complaints often dragged on for years.
