Gujarat Assembly passes Rent Bill, replacing 1947 law; sets three-tier dispute resolution system

Gandhinagar: The Gujarat Assembly has unanimously passed the Gujarat Rent Bill, 2026, paving the way for a new legal framework governing rental agreements across the state and replacing the decades-old system under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.

The Bill, introduced by Urban Development Minister Kanu Desai, makes written rent agreements mandatory for both residential and commercial properties and proposes a three-tier mechanism comprising a Rent Authority, Rent Court and Rent Tribunal for time-bound resolution of disputes between landlords and tenants.

Desai said the existing law had to be extended from time to time and its limitations had resulted in legal complications for both landlords and tenants. "The new legislation has been framed to meet the present-day requirements of Gujarat," he said.

Under the new framework, details of every written rental agreement will have to be jointly submitted to the Rent Authority.

The authority will also develop a digital platform in Gujarati within three months, with each registered agreement being assigned a unique identification number and uploaded on the website.

The ID will serve as an important record for both parties. The Bill also caps the advance security deposit at three months' rent. Once a tenant vacates the property and all accounts are settled, the deposit will have to be returned within one month.

The proposed three-tier system is aimed at providing a structured mechanism for dealing with rental disputes.

The Bill also prohibits landlords from cutting off essential services such as electricity, water and gas to tenants. In such cases, the Rent Authority will have the power to order immediate restoration of the services.

The legislation sets out specific grounds for eviction under Section 21. A landlord can approach the Rent Court for eviction if a tenant continuously fails to pay rent, damages the property or sublets it without permission.

The Bill also provides relief to tenants when a property becomes uninhabitable due to natural disasters such as floods, earthquakes or cyclones.

In such circumstances, tenants can receive exemption from rent or a reasonable opportunity to extend the rental agreement. Section 18 provides legal recognition to property managers appointed by landlords and defines their role and responsibilities within the legal framework.

Certain properties and institutions have been exempted under Section 3, including government premises, service quarters provided by companies to employees, properties belonging to religious and charitable institutions, the Waqf Board and public trusts.

However, such parties can mutually agree to come under the provisions of the Act. Desai said the legislation was intended to bring greater clarity to landlord-tenant relations and improve transparency in the rental and real estate sector.

"The Gujarat Rent Act is not merely a legal document, but an important link connecting the economic and social fabric of Gujarat. This law provides the landlord with appropriate justice and the tenant with a roof under which to live with dignity. This Bill will bring transparency to the real estate market, enhance 'Ease of Living' and further strengthen an atmosphere of mutual trust in the state," he said.

The Gujarat Rent Bill, 2026, was passed unanimously without opposition in the Assembly on Friday.

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