Rental Agreement Laws in India: What Landlords & Tenants Should Know

Whether you're renting out a flat in Undri or moving into one, a clear, properly executed rental agreement protects both sides. Here's what actually governs these agreements in India, and in Maharashtra specifically.

What law governs rental agreements?

Rental agreements in India are primarily governed by state-specific Rent Control Acts, which vary from state to state. The central government introduced the Model Tenancy Act, 2021 as a framework state governments can adopt to modernise and balance landlord-tenant rights — but adoption isn't automatic or uniform, so the exact rules that apply depend on your state's own legislation. Always check what your specific state has actually enacted rather than assuming the Model Tenancy Act's provisions apply by default.

Why are most rental agreements exactly 11 months?

This is one of the most common questions we get, and the answer is purely procedural: under the Registration Act, 1908, any lease of 12 months or longer must be compulsorily registered with the sub-registrar, which adds registration fees and a visit to the registrar's office. An 11-month agreement falls just under that threshold — it still needs to be executed on stamp paper (or e-stamped), but doesn't trigger the mandatory registration requirement. This is why landlords and tenants across India overwhelmingly use 11-month agreements, renewed periodically, rather than longer leases.

Stamp duty on rent agreements in Maharashtra

In Maharashtra, stamp duty on a leave-and-licence (rental) agreement is calculated at 0.25% of the total consideration value — which includes the total rent payable over the term plus the security deposit (or a notional interest on an interest-free deposit, depending on how it's structured). This is separate from, and much smaller than, the stamp duty on an outright property sale.

Security deposits

There's no single national cap on security deposits — this is exactly the kind of provision that differs by state and by whether the Model Tenancy Act has been adopted locally. Where adopted, the Model Tenancy Act suggests capping residential security deposits at around two months' rent. In Maharashtra and many other states, however, security deposits are set by mutual agreement between landlord and tenant, and it's common in practice to see deposits well above two months, particularly in high-demand areas. Always confirm the deposit amount and refund terms in writing.

Essential clauses every rental agreement should have

• Rent amount and due date, including any agreed annual escalation
• Security deposit amount and the conditions for refund/deductions
• Duration of the agreement and renewal terms
• Notice period required from either side to terminate
• Maintenance responsibilities — who pays society charges, repairs, etc.
• Permitted use of the property (residential vs. commercial)
• Restrictions, if any, on subletting or structural changes

E-stamping is now the norm

Across most states, physical stamp paper has largely been replaced by e-stamping, where a digitally generated stamp certificate of the required value is purchased online or through authorised centres — making the process faster and reducing the risk of fake stamp paper.