Karnataka Proposes ₹50,000 Fine for Illegal Subletting Under New Rent Law

The Karnataka government is moving towards significant reforms in rental regulations, aiming to modernize the state’s Rent Control Act, 1999. Under the proposed amendments, tenants who engage in illegal subletting could face a hefty penalty of up to ₹50,000 or double the rent earned from such arrangements, whichever is higher.

The amendments, cleared by the state cabinet last week, will soon be tabled in the upcoming winter session of the legislature at Belagavi. The move aligns Karnataka’s rental framework with the Centre’s Jan Vishwas Act, 2025, which focuses on decriminalizing minor offences while replacing them with strict financial penalties.

Currently, violations such as unauthorized subletting, unlawful eviction of tenants, falsification of property documents, or failure to register real estate agents carry fines as low as ₹5,000, along with the possibility of up to one month’s imprisonment. With the new changes, imprisonment clauses are being removed, but penalties will rise steeply, in some cases by 900% to 2,500%.

For landlords, the amendments bring equal scrutiny. Any attempt to evict tenants unlawfully, particularly when courts have ordered the property to be re-let to the original tenant, can attract fines of up to ₹50,000 or double the rent amount. The focus is clearly on discouraging exploitative practices while ensuring fair tenancy.

Real estate agents and middlemen are also under the scanner. Agents who fail to register with state-appointed rent controllers will no longer face jail terms but will instead be liable to pay daily fines of ₹20,000 until compliance. Industry experts say this step may bring more accountability into the resale market, where awareness of mandatory registration remains low.

To streamline dispute resolution, assistant commissioners and tahsildars have been designated as rent controllers across Karnataka. These officials will be empowered to adjudicate rental disputes, reducing the burden on the judiciary while ensuring faster enforcement.

With Bengaluru emerging as a fast-growing hub for real estate and rental housing, the government’s decision is expected to bring greater discipline to the market. While tenants and landlords may feel the pinch of higher penalties, the long-term goal is to create a more transparent and balanced rental ecosystem.