BENGALURU: Karnataka’s rental market is inching towards reform with the state government passing the Karnataka Rent (Amendment) Bill, 2025, during the recently concluded legislative session. However, the gap between the Model Tenancy Act’s (MTA) vision and ground-level practice continues to persist.
Despite increasing awareness about deposit caps, written agreements and registration norms, enforcement remains patchy, leaving tenants vulnerable. Experts warn that without state-specific rules and robust dispute-resolution mechanisms, the benefits of the Act may largely remain on paper. A state-specific tenancy framework is currently under discussion.
In Bengaluru, tenants continue to report arbitrary deposit demands, inconsistent agreements and cash-only transactions, even as the state signals openness to adopting the updated MTA. In one instance, a tenant was asked to pay a Rs 10 lakh deposit for a flat with a monthly rent of Rs 60,000 in central Bengaluru.
A chartered accountant who has rented in the city for over a decade described the system as a “rental mafia”, recalling instances where landlords refused to sign written agreements and demanded large sums upfront. Deposit refunds, she said, remain “a nightmare”, particularly in standalone buildings.
Bangalore Apartments Federation president Satish Mallya acknowledged the need for reform, noting a spike in deposit-related complaints from tenants in high-density IT corridors such as Whitefield. Karnataka, he said, “is bound to take time in implementing the proposed Karnataka Rent (Amendment) Act, 2025”, as the framework must balance existing state practices with the MTA’s provisions.
He also stressed the need for mandatory registration of rental agreements, which continues to be ignored in most residential properties despite being standard practice in commercial leasing.
Ayub Khan of the Bangalore Realtors Association of India said the new framework could benefit middle-class tenants but cautioned that landlords also face risks. “Many tenants default on rent for months and then drag landlords into prolonged legal battles,” he said, adding that reforms must safeguard both sides to prevent resistance.
Industry analyst Seema Harsha, co-founder of IndiaAssetz, said compliance varies widely. While organised apartment complexes are increasingly adopting digital stamping, formal agreements and transparent processes, standalone properties continue to lag.
“Although the two-month deposit cap is widely discussed, landlords continue to demand significantly higher amounts, driven by mistrust and slow dispute resolution,” she said, adding that awareness has outpaced enforcement.