Bengaluru's rental landscape is undergoing a significant transformation with the introduction of new rules designed to balance the interests of tenants and landlords. These changes address long-standing issues such as high security deposits, lack of transparency, and arbitrary rent increases, aiming to create a fairer and more regulated rental market in the city. The Home Rent Rules 2025, based on the Model Tenancy Act (MTA), are expected to bring clarity, legal structure, and increased accountability to the rental process.

Key Changes for Tenants

• Capped Security Deposits: One of the most significant changes is the limitation of security deposits to a maximum of two months' rent for residential properties. This addresses the long-standing issue of exorbitant upfront deposits, which often ranged from six to ten months' rent, making it difficult for many to secure housing.
• Mandatory Registration of Agreements: All rental agreements must now be digitally stamped and registered with the Rent Authority within two months of signing. This ensures legal validity, records the terms of the agreement clearly, and helps reduce disputes. Unregistered agreements may incur penalties.
• Regulated Rent Increases: Landlords can only increase rent once every 12 months and must provide tenants with a written notice at least 90 days in advance. This prevents sudden and arbitrary rent hikes, allowing tenants to plan their finances accordingly.
• Protection Against Unlawful Eviction: Tenants cannot be evicted without a valid reason and a formal eviction order from the Rent Tribunal. Actions such as changing locks or cutting off essential services are now punishable.
• Right to Privacy: Landlords must provide at least 24 hours' written notice before entering the property for inspections or repairs, except in emergencies.
• Essential Repairs: If landlords fail to address essential repairs within 30 days of notification, tenants can undertake the repairs themselves and deduct the expenses from the rent, provided they have valid proof of the expenses.

Benefits for Landlords

While the new rules heavily focus on tenant protection, they also include provisions to safeguard landlords' interests.

• TDS Exemption Increased: The threshold for Tax Deduction at Source (TDS) exemption on rental income has been raised from ₹2.4 lakh to ₹6 lakh annually, reducing the tax burden on landlords.
• Simplified Taxation: Rental income will now be categorized under a single category: "Income from Housing Property," simplifying tax compliance.
• Faster Action on Rent Defaults: If a tenant defaults on rent payments three times a year, landlords can seek direct intervention from the Rent Tribunal.
• Damage Recovery: Landlords can deduct costs for any damages beyond normal wear and tear from the security deposit, provided it is documented.

Amendments to the Karnataka Rent Control Act

In addition to the Home Rent Rules 2025, the Karnataka government has amended the Karnataka Rent Control Act, 1999, replacing imprisonment with steeper monetary fines for rental disputes.

• Increased Penalties: Fines for violations such as unauthorized subletting and illegal evictions have been increased up to ₹50,000 or double the rent, whichever is higher.
• Decriminalization of Rental Disputes: The amendments remove the possibility of imprisonment for violations, aligning with the central government's Jan Vishwas Act, 2025, which aims to decriminalize minor offenses across sectors.
• Empowered Rent Controllers: Assistant Commissioners in municipal areas and Tahsildars in urban and rural areas have been designated as Rent Controllers, responsible for enforcing the Act and adjudicating rental disputes.

Impact and Enforcement

These reforms are designed to streamline the rental process, enhance accountability, and foster trust between property owners and renters. Mandatory registration of leases makes it easier for tenants to assert their rights and for regulators to monitor adherence. The increased penalties for violations aim to deter illegal activities and ensure compliance with the law. However, some concerns remain about the actual implementation and compliance by landlords.

Overall, the new rules and amendments represent a significant step towards creating a more balanced and regulated rental market in Bengaluru, protecting the interests of both tenants and landlords while promoting transparency and fairness.