BHUBANESWAR: The state government is gearing up to introduce new legislation to regulate tenancy, including mandatory written agreements, security deposit caps, and the establishment of rent authorities and courts for expedited dispute resolution. The proposed Odisha Urban Area Rent Control Act, 2026, released by the housing and urban development department on Saturday, is set to replace the aging Orissa House Rent Control Act of 1967 and its amendments, marking a significant transformation in urban rental housing governance within the state. Notably, the draft does not stipulate how much rent landlords can charge; that is left to agreements between tenants and landlords.
The new law aims to create a structured framework consisting of rent authorities, courts, and tribunals to manage disputes with a focus on timely resolution.
The draft includes crucial protections for tenants concerning rent defaults. An eviction order cannot be issued if a tenant pays overdue rent along with any charges and interest within one month of a demand notice. However, stricter rules apply if a tenant defaults: failing to pay rent for two consecutive months in a single year will revoke their right to seek this protection again, thus balancing tenant security with landlord rights.
Another important requirement within the draft is that all rental agreements must be documented in writing and submitted to a specified rent authority and local police within a defined period, enforcing mandatory registration and documentation for both parties. Additionally, the authority will develop a digital platform to keep track of tenancy agreements and issue unique identification numbers.
The proposed legislation strives to balance the interests of both landlords and tenants by clearly outlining their rights and obligations. The cap on security deposits is set at two months’ rent for residential properties and six months for non-residential spaces, with provisions for rent adjustments based on agreed terms in the tenancy contract.
To resolve disputes, the draft establishes a formal grievance redress system. Rent authorities will address issues such as rent adjustments and service matters, while rent courts and tribunals are designated to handle eviction cases and appeals, with a goal of resolving cases within 60 to 90 days.
Additionally, the legislation disincentivizes tenants from overstaying by imposing penal rent of up to four times the monthly amount for those who refuse to vacate after the lease has expired.
The draft further prohibits the withholding of essential services like water, electricity, and sanitation, imposing penalties for violations. It also clarifies maintenance and repair responsibilities for both landlords and tenants to minimize disputes.
