Rental Property means a parcel of residential real property that is wholly owned by or acquired by a Borrower and the fee title to which is held by such Borrower, together with all Improvements thereon and all other rights, benefits and proceeds arising from and in connection with such property.

Laws in India are the state laws enact to govern the rental agreements in various aspects. These fall under the ambit of Rent Control Act. Each state has its own Rent Control Act. For instance, Rent Control Act (1999) Maharashtra, Rent Control Act (1958) Delhi, Tamil Nadu Buildings (Lease and Rent Control) Act (1960) Chennai govern the state’s rent agreements. This means these are also referred to settle disputes between the landlords and the tenants in their respective states.

Rental laws in India provides tenants with the security and also landlords their ability to evict tenants. In general, the main features of rental laws existing in India are:

  • Various laws are imposed while one is planning to rent out a property for both commercial and residential use. Laws are imposed irrespective of the size of the property being rented to help potential tenants identify and secure good rental accommodation.
  • These laws govern the rental rates such that fair rents are being imposed within the standardized rental ranges that may vary from state to state. A landlord cannot charge its tenants beyond these rates.
  • These laws are also made with the intention to protect the tenants from unfair eviction by their landlords due to any kind of discrimination.
  • Laws also define landlord’s responsibilities and obligations towards its tenants. This includes the terms and conditions for maintenance of the property.
  • On the other hand, it also defines the rights of the landlords, that he may use in case a tenant does not fulfill their obligations for paying rent on time or misuse of property in any manner. This also means the landlord can object to the use of his property d=for reasons not specified in the agreement.


In India, renting or letting out of any property for residential or commercial purposes is subjected to various rules and regulations, such as: – Under the law, it is a must to have a written agreement between the two parties enumerating all the terms and conditions of tenancy.

An agreement reached without being expressly put in writing will not be a valid contract in the following cases:

  • Any changes regardless of the type of rectification must also be put in writing.
  • The agreement must be dated and signed by both parties, i.e. the landlord and the tenant.
  • The agreement must be stamped and registered.
  • Without a valid rental agreement, the rights and duties of the landlord and the tenant cannot be enforced or protected by law.

Therefore, it is always prudent to enlist the help of a legal practitioner in the making of such an agreement as many complexities entail, especially for commercial leasing.

Rental agreements that are over 12 months have to abide by strict rent control laws that are most favourable to the tenants. The Rental control laws currently prevent the landlords from overcharging the tenants and protect the tenants from sudden or unfair eviction.  Also, the right to ownership of the property gets transferred from the landlords to the tenants in case of a lease agreement, making it harder for the landlord to vacate a tenant. Hence, Landlords do not prefer to enter into rental agreements that are over 12 months.

Rent agreement format must include some significant aspects:

  • The consistency of license fee to be paid in the entire period
  • Clarity of costs associated, such as; municipal taxes, society fees, and other charges.
  • Return of deposits when the lease is terminated.
  • Clauses defining what happens in case the expectation is not met.


In order to rent a property, a rental agreement is signed by the parties outlining the terms of the agreement. It thus becomes a legally binding contract between both the parties; landlord and the tenant, to abide by the contract and the follow the rights and responsibilities of them. The rent agreement must include the cost of the rent, amount of security deposit, date of depositing the rent, and other conditions of using the premises. In case of violation of the agreement, the aggrieved party shall apply for relief in civil court.

However, Rent Control Act cannot be applied to premises that have been let out to banks, public sector undertakings or any corporation established by or under any state or central act, foreign missions, multinational companies, and international agencies. For premises let out to private limited and public limited companies having a paid-up share capital of one crore rupees or more do not come under the ambit of Rent Control Acts.In the monthly rent payable exceeds 3500 rupees, the rental agreement is subject to the Transfer of Property Act (TPA). It assigns the landlord with responsibilities including regarding disclosure of information regarding material defects in the property. The rental agreement regulations in India on landlord and tenants are archaic. The national government is encouraging local bodies to relax these laws in order to encourage investments in construction and housing.


Aishwarya Says:

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