New 2025 rental law makes registration mandatory for all agreements

India’s new rental regulation aims to protect both tenants and homeowners by enforcing compulsory registration, restricting advance payments and setting up special rent courts.

The Union Government has introduced a major change in the country’s rental housing system with the rollout of the 2025 rental agreement rules. The new law is expected to impact homeowners and tenants alike, especially middle-class families who either invest their lifetime earnings to build a house or continue to rely on rented homes due to financial constraints.

As per the new regulation, every rental agreement, irrespective of the type or duration, must be officially registered. The registration can be completed online or at the nearest sub-registrar office. Homeowners are required to complete this process within two months of leasing out the property. Any delay beyond the two-month period can attract a penalty of up to ₹5,000.

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The updated rules also introduce strict limits on advance payments. For residential properties, landlords can collect only up to two months’ rent as advance. For commercial spaces, the permitted advance amount is capped at six months’ rent. If a landlord demands or accepts a higher amount, tenants have the right to file an action and take the matter to court.

To ensure that rental-related complaints are resolved without long delays, the government has set up dedicated Rent Courts and Tribunals. These bodies will specifically handle disputes related to excessive advances, eviction issues, delayed agreements and other disagreements between landlords and tenants.

The Centre’s move comes in response to widespread issues arising from informal and unrecorded rental arrangements across India. A large number of agreements are still being made verbally or on handwritten sheets, leaving both parties legally vulnerable. Disputes over rent, advances and forced evictions have been common, and the lack of proper documentation has often left tenants unprotected while also exposing landlords to fraud.

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Under the new law, any agreement lasting 11 months or more must be registered, and unregistered documents will not be considered valid. Authorities expect this reform to reduce cheating, prevent conflicts and increase transparency in the rental housing sector.

The 2025 rental law is positioned to bring clarity, accountability and security to India’s rental market, offering stronger legal protection to both homeowners and tenants, while ensuring that improper practices are gradually eliminated.