Karnataka Assembly Passes Rent (Amendment) Bill 2025:

Karnataka Assembly Passes Rent (Amendment) Bill 2025: Jail Terms Replaced by Steep Fines in Major Tenancy Overhaul

Bengaluru, December 21, 2025: The Karnataka Legislative Assembly cleared the Karnataka Rent (Amendment) Bill, 2025, on December 16, marking a significant shift in the state’s tenancy laws by decriminalizing minor violations under the Karnataka Rent Act, 1999, and replacing imprisonment with hefty monetary penalties. This move aligns with the central government’s Jan Vishwas Act, 2023, emphasizing “Minimum Government, Maximum Governance” by reducing criminal cases for procedural lapses while imposing stricter financial deterrents on landlords and tenants.​

Core Changes to Penalties and Offences

The Bill amends multiple sections of the 1999 Act to eliminate jail terms for several offences, substituting them with fines that can reach up to ₹50,000 or double the excess rent collected, whichever is higher. Key revisions include:​

• Unlawful sub-letting or re-letting at higher rents: Previously punishable by up to three months’ imprisonment and fines; now solely fines up to ₹30,000–₹50,000.​
• Failure to provide rent receipts or misuse of deposits: Fines escalated from nominal amounts (₹1,000–₹5,000) to ₹10,000–₹25,000, with repeat offences attracting double penalties.​
• Eviction without due process or rent hikes beyond agreed terms: Decriminalized but with fines tied to the aggrieved party’s loss, capped at twice the monthly rent.​

These changes apply to both residential and non-residential properties, aiming to unclog courts by diverting routine disputes to civil recovery rather than criminal prosecution.​

Broader Context: Home Rent Rules 2025 Integration

The amendment dovetails with Karnataka’s adoption of the national “Home Rent Rules 2025” framework, inspired by the Model Tenancy Act, which mandates online registration of agreements within 60 days, caps security deposits at two months’ rent, and limits annual hikes to 5–10% with prior notice. While the Bill focuses on penalties, state notifications are expected to enforce digital portals for e-stamping, Aadhaar-linked verification, and fast-track tribunals for evictions—potentially transforming Bengaluru’s rental market, where millions of IT professionals rely on short-term leases.​

Implications for Tenants and Landlords

Tenants gain from reduced criminal intimidation in disputes, clearer deposit protections, and tribunal-based resolutions, but must adapt to formal registration to claim these safeguards. Landlords benefit from avoiding jail for technical errors, yet face higher financial risks for non-compliance, such as arbitrary evictions or undocumented sub-leasing—prompting calls for updated lease templates. Industry experts predict fewer informal 11-month deals, boosting transparency but possibly raising effective costs in high-demand areas like Whitefield and Sarjapur.​

Legislative Journey and Next Steps

Introduced as LA Bill No. 67 of 2025 during the Eighth Session of the Sixteenth Assembly, the Bill passed alongside 11 others in a swift session with minimal debate, now awaiting Legislative Council approval and Governor’s assent to become Karnataka Act No. 36 of 2025. Critics note the rushed passage skipped stakeholder consultations, while proponents hail it as pro-business reform easing enforcement burdens.​

This overhaul positions Karnataka at the forefront of tenancy modernization, potentially influencing other states amid India’s rental housing boom driven by urban migration and GCC expansion.​

  Rent (Amendment) Bill 2025