From lock-ins to rent hikes: Rental clauses that can trip up tenants

From lock-in periods to vague maintenance terms, here's what legal experts say tenants must watch for in rental agreements to protect their money and peace of mind

Many tenants sign rental agreements in India without reading the fine print, only to regret it later. Legal experts say certain overlooked clauses can leave you saddled with unexpected costs, legal disputes, or even force you to stay in a property longer than planned. Here’s a guide to the most critical provisions and what they mean for you. 

Why does the fine print matter? 

“Tenants often miss crucial clauses like the lock-in period, rent escalation, and maintenance responsibilities. Later, these become grounds for hefty penalties or disputes,” said Rohit Jain, managing partner at law firm Singhania & Co.

 

For example, if you’re bound by a 12-month lock-in clause but vacate in six months due to a job transfer, the landlord can demand rent for the remaining six months or forfeit your entire security deposit. “We’ve handled cases where tenants were asked to pay Rs 150,000 (six months’ rent) after moving out early,” he adds. 

 

 

Security deposits and rent hikes: Know the rules 

Security deposit deductions are another flashpoint. “Tenants don’t realise vague terms like ‘beyond normal wear and tear’ allow landlords wide discretion,” says Ashutosh Srivastava, partner at SKV Law Offices.

 

For example, you pay a Rs 50,000 deposit on a flat with Rs 25,000 monthly rent. At move-out, the landlord deducts Rs 10,000 for painting, Rs 5,000 for cleaning, and Rs 3,000 for minor repairs, even without major damages, leaving you just Rs 32,000. “Unless the agreement specifies acceptable deductions, tenants can’t contest such claims easily,” Srivastava explains.

 

Rent escalation clauses also deserve scrutiny. “A 10 per cent annual hike means Rs 25,000 rent becomes Rs 30,250 by year three, something tenants often don’t budget for,” notes Jain.

Tricky clauses to watch out for

Landlords sometimes include restrictive terms that tilt the balance.

 

Lock-in period: This traps tenants into staying or paying penalties. “We’ve seen people pay 3 months’ rent, Rs 75,000, after vacating early due to job transfers,” says Gaurav K Singh, founder & chairman of Womeki Group.

 

Subletting bans: Hosting friends or family, even temporarily, could breach the agreement unless expressly permitted.

 

Broad maintenance obligations: Tenants are sometimes made responsible for structural repairs or society charges, which are legally the landlord’s duty unless agreed otherwise, Singh adds.

 

What if the landlord enforces unfair clauses?

If landlords impose unfair penalties, tenants have remedies under Indian law.

 

“Unconscionable or one-sided clauses can be challenged in court. For instance, a Bengaluru tenant recovered Rs 70,000 of her Rs 100,000 deposit after legal notice, despite the landlord citing vague ‘repair charges’,” says Jain.

 

Aarya Bhat, advocate at Delhi High Court, cautions. “Courts may reject challenges if agreements were signed without proper scrutiny. So it’s better to get the agreement vetted before signing.”

 

Understanding key terms in rental agreements

Here’s a quick explainer of common technical terms:

 

Lock-in period: The minimum time both tenant and landlord are bound by the lease. Breaking it early often triggers penalties.

 

Notice period: The time either party must give before ending the lease (e.g., 2 months).

 

Force majeure: Covers unforeseen events like natural disasters that could make the property uninhabitable.

 

Maintenance & repairs: Specifies who handles upkeep, tenant or landlord.

 

Subletting clause: States whether you can rent out part of the property or host others.

 

Termination clause: Details how and when the lease can be ended by either side.

 

Indemnity clause: A legal safeguard requiring one party to compensate the other for losses caused by breaches.

 

The bottom line

 

“Tenants must not treat rental agreements as mere formalities,” Srivastava advises. Spending a little time and money on legal vetting could save thousands later.