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New Delhi: In a major legal and administrative overhaul likely to reshape landlord-tenant relations in Chandigarh, the Centre has extended the Assam Tenancy Act, 2021, to the Union Territory, replacing the decades-old East Punjab Urban Rent Restriction Act, 1949, that had governed rental arrangements in the city for more than 75 years.

The move, notified by the Ministry of Home Affairs under Section 87 of the Punjab Reorganisation Act, 1966, empowers the Centre to extend laws from any state to Chandigarh, which does not have its own legislature. The new legislation will now operate under the title “Assam Tenancy Act, 2021, as extended to the Union Territory of Chandigarh” and comes into force from the date of its publication in the official Gazette.

Why the Centre replaced the 1949 law

For decades, Chandigarh’s rental ecosystem operated under the East Punjab Urban Rent Restriction Act, 1949 — a law framed in a vastly different socio-economic era. Over the years, the legislation drew criticism for heavily favouring tenants, delaying eviction proceedings, discouraging rental housing investments, and lacking provisions suited to a modern urban rental market.

Officials believe the extension of the Assam Tenancy Act introduces a more balanced, transparent, and technology-driven framework that protects both landlords and tenants while streamlining dispute resolution. The law has been suitably modified for Chandigarh’s administrative structure by replacing references to the “State Government” with the “Administrator” of Chandigarh and substituting “State of Assam” with “Union Territory of Chandigarh” throughout the Act.

Written agreements are now mandatory.

One of the most significant reforms under the new law is the requirement to execute written tenancy agreements for all rental arrangements. Landlords and tenants must jointly inform the Rent Authority within two months of signing the agreement. If they fail to do so jointly, both parties are individually required to report the tenancy within the following month.

The provision aims to formalise rental transactions and eliminate informal verbal arrangements that often lead to disputes. Every tenancy will now create an official, digitally verifiable legal record.

Digital registration system to be introduced

The Act also mandates that the Rent Authority establish a digital platform within three months of its appointment. This online system will allow electronic submission and registration of tenancy agreements. Once verified, each tenancy will receive a unique identification number, and its details will be uploaded online within seven working days.

The digital mechanism is expected to bring greater transparency to Chandigarh’s rental market while reducing bureaucratic delays and record manipulation.

Big relief on security deposits

The new tenancy framework places clear caps on security deposits — a longstanding concern among tenants in Chandigarh’s expensive rental market. Under the law, landlords cannot demand more than two months’ rent as a security deposit for residential properties and more than six months’ rent for commercial premises.

The move is expected to especially benefit students, working professionals, and migrant families who often struggle with hefty advance payments.

Rules for rent hikes tightened.

The Act introduces structured provisions for rent revision. Landlords can increase rent only in accordance with the tenancy agreement or after making structural improvements and additions with the tenant’s written consent. In the event of a disagreement, the Rent Authority has been empowered to determine the revised rent and the effective implementation date.

This provision seeks to prevent arbitrary rent increases while still allowing landlords a reasonable return on property improvements.

Maintenance responsibilities are clearly divided.

For the first time, the law lays down a detailed division of maintenance duties between landlords and tenants. Structural repairs, painting, plumbing replacements, and electrical wiring maintenance fall under the landlord’s responsibility. Meanwhile, tenants are tasked with day-to-day upkeep, including repairing taps, switches, locks, kitchen fittings, and geysers, as well as maintaining the gardens or open spaces assigned to them.

Legal experts say this clarity could substantially reduce recurring disputes over maintenance obligations.

Protection against unfair eviction

The Act provides safeguards to tenants against arbitrary eviction. A tenant cannot be evicted during the tenancy period except on legally specified grounds such as non-payment of rent for two consecutive months, unauthorised subletting, structural misuse, illegal alterations, or reconstruction requirements.

Even in cases of rent default, tenants are granted a one-month opportunity to clear pending dues after receiving a notice before eviction proceedings can proceed.

Safeguards during disasters and emergencies

A notable humanitarian feature of the law is the protection it offers tenants during natural disasters and emergencies, such as floods, fires, cyclones, droughts, earthquakes, or war-like situations. If a rented premises becomes uninhabitable, the tenant cannot be forced out immediately and is entitled to remain in possession for up to one month after the calamity subsides. Landlords are barred from charging rent for the period during which the premises remain unfit for occupation.

Where restoration is impossible, landlords must refund the full security deposit and advance rent after deducting legitimate charges.

Essential services cannot be cut off.

The legislation also prevents landlords or property managers from withholding essential services, including water supply, electricity, piped gas, lift access, sanitation, parking, security systems, and communication facilities.

If such services are deliberately interrupted, the Rent Authority may order immediate restoration and award the tenant compensation of up to two months’ rent. At the same time, tenants filing frivolous complaints may face penalties up to twice the monthly rent.

Heavy penalties for overstaying tenants

The law imposes stringent financial penalties on tenants who continue occupying premises after the expiry of the tenancy or lawful eviction. Such occupants will have to pay double the monthly rent for the first two months of unauthorised stay and four times the rent thereafter until the property is vacated.

The provision is intended to discourage prolonged litigation and unlawful occupation of rental properties.

Three-tier dispute resolution system

The new framework establishes a dedicated three-tier adjudication system comprising the Rent Authority, Rent Court, and Rent Tribunal. Cases are expected to be resolved within defined timelines of 30 to 90 days, depending on the nature of the dispute. Appeals will ultimately lie to a Rent Tribunal, headed by a District Judge or an Additional District Judge.

This specialised structure replaces the slower conventional court process and is intended to ensure quicker dispute settlement.

Old cases to continue under the previous law

While the East Punjab Urban Rent Restriction Act, 1949, is now repealed in Chandigarh, all pending cases filed under the old law will continue to be heard and decided in accordance with the previous legal framework.

The transition, therefore, is expected to be gradual rather than abrupt, giving both landlords and tenants time to adapt to the new regulatory regime.