Heavy penalty for overstaying tenants: Centre extends Assam Tenancy Act to Chandigarh
The new law replaces the decades-old East Punjab Urban Rent Restriction Act, 1949, in Chandigarh.
The law seeks to establish a modern, transparent and digitally monitored tenancy framework governing residential and commercial rentals. (File Photo, enhanced using AI) The Centre has extended the provisions of five state legislations, including three of Punjab, to Chandigarh, one of which is the Assam Tenancy Act, 2021 — it not only introduces heavy penalties if tenants overstay but also specifies a cap on security deposits, and rights and duties of landlords and tenants.
The Ministry of Home Affairs notified the move under Section 87 of the Punjab Reorganisation Act, 1966, through a Gazette notification issued on May 6, 2026.
The new law replaces the decades-old East Punjab Urban Rent Restriction Act, 1949, in Chandigarh. It seeks to establish a modern, transparent and digitally monitored tenancy framework governing residential and commercial rentals.
The UT officers said the move is intended to improve ease of living in the rental housing sector, formalise rental arrangements, balance the interests of landlords and tenants through a structured legal framework,and reduce rental disputes.
The law is expected to significantly change how rental properties are managed in Chandigarh.
Heavy penalty for staying after tenancy ends
The law introduces financial penalties for tenants who continue occupying premises after expiry of tenancy.
Such tenants may have to pay double the monthly rent for the first two months and four times the monthly rent thereafter till vacating the premises.
For instance, if the agreed monthly rent of a house is Rs 20,000 and the tenant refuses to vacate after tenancy expires, the tenant would pay Rs 40,000 monthly for the first two months. Thereafter, the amount would rise to Rs 80,000 monthly until the property is vacated.
The clause is to discourage prolonged unauthorised occupation of rented houses.
Written rent agreements mandatory
Under the new law, no property can now be rented out without a written tenancy agreement. Landlords and tenants will have to jointly inform the Rent Authority about the agreement within two months of execution. If both parties fail to do so jointly, they can separately submit details within an additional month.
The law also mandates creation of a digital platform for online submission and management of rental documents, bringing rental agreements into a formal regulatory system.
Cap on security deposits
The law places limits on security deposits charged by landlords.
For residential premises, the maximum security deposit cannot exceed two months’ rent, while for non-residential or commercial properties, the cap has been fixed at six months’ rent.
Rights and duties of landlords, tenants defined
The Act clearly lays down responsibilities on the landlords and tenants regarding payment of rent, maintenance and repairs.
Landlords and tenants will be responsible for maintaining premises in good condition, except for normal wear and tear. The law also specifies that landlords cannot arbitrarily cut off essential services such as water supply, electricity, sanitation, security arrangements, parking access or lift facilities.
If a landlord unlawfully discontinues essential services, the Rent Authority can order immediate restoration and even award compensation to the tenant.
Rules for entry and property inspection
The Act says landlords or property managers can enter rented premises only after giving at least 24 hours’ prior notice, except during emergencies such as fire, flood or natural disasters. Entry will generally be permitted only between sunrise and sunset for repairs, inspection or other legitimate reasons mentioned in the tenancy agreement.
Subletting restricted
Tenants will not be allowed to sublet the whole or part of a property without a supplementary written agreement and prior information to the Rent Authority.
New dispute resolution mechanism
The law creates a three-tier dispute resolution system consisting of Rent Authority, Rent Court and Rent Tribunal.
In Chandigarh, the Deputy Commissioner, with approval of the Administrator, will appoint officers not below the rank of Tehsildar as Rent Authorities.
The system is to ensure faster resolution of tenancy disputes, rent revision matters and eviction cases.
Grounds for eviction listed
The Act allows landlords to seek eviction in specific circumstances, including non-payment of rent, premises misuse, unauthorised structural changes, illegal subletting, requirement for reconstruction or redevelopment, genuine requirement of legal heirs after landlord’s death or sale of property where possession becomes necessary.
However, tenants can avoid eviction in some cases by clearing rent dues within the stipulated period after notice.
Old pending cases to continue under previous law
While the new Act repeals the East Punjab Urban Rent Restriction Act, 1949, in Chandigarh, all cases already pending under the old law will continue to be heard and decided according to the previous section.
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