New rent law puts rental agreements online, caps deposit at 3 months

Gandhinagar: Renting a house or commercial property in Gujarat is set for a major overhaul, with state assembly passing Gujarat Rent Bill, 2026, to make rental transactions more transparent and give both tenants and landlords clearer legal rights.

The new law makes written rent agreements mandatory for residential as well as commercial properties. Details of every agreement will have to be submitted to the rent authority, which will create a digital platform within three months. Each agreement will receive a unique identification number and will be uploaded online, creating a formal digital record of rental transactions.

For tenants, one of the biggest changes is a cap on the security deposit at three months’ rent. Landlords will have to return the deposit within one month of the premises being vacated, after adjusting legitimate dues.

The legislation also introduces a three-tier dispute resolution system comprising the rent authority, rent court and rent tribunal, aimed at ensuring quicker settlement of disputes.

Tenants will get protection when a rented property becomes uninhabitable because of natural disasters such as floods, earthquakes or cyclones. In such cases, they can seek a waiver of rent or a reasonable opportunity to extend the tenancy.

The law, however, also lays down clear grounds for landlords to seek eviction. Under Section 21, eviction can be sought through the rent court if a tenant repeatedly defaults on rent, damages the property or sublets it without permission.

At the same time, landlords cannot use essential services as leverage against tenants. Water, electricity and gas cannot be disconnected, and the rent authority can order their immediate restoration.

Govt properties, company service quarters and properties belonging to religious and charitable institutions, the Waqf Board and public trusts have been kept outside the bill’s ambit.

The legislation replaces the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, which had governed rent-related matters in Gujarat.

Urban development minister Kanu Desai said the new law would protect landlords’ rights while ensuring tenants have a secure and dignified home, besides improving transparency in the rental and real estate market.