Allahabad resident Anindita Basu’s relative had such an experience. “The tenant had been living in her apartment for many years. When she told him to vacate because she wanted to move there, he refused to do so. My relative had to take the legal route. It took her four years to evict him with a court order,” Basu said.
Basu’s own retirement is five years away. She has a property in Bengaluru that she plans to rent out once she retires. “Since I won’t be living in Bengaluru I am worried about managing my property and giving it to tenants. I have decided I’ll hire a property manager like Nestaway who’ll take a certain cut from my rental income and manage my property on my behalf. They’ll do background verification of tenants and get the rental agreement done,” she said. The current rent rate for her Bengaluru property is around ₹30,000. “Once I retire, it will bring in 50% of my expenses. The rest will come from my mutual funds and fixed deposits,” she said.
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Kamal Kishore Mundhada (67) from Noida said he simply avoids giving his apartment to local residents. “I prefer those in the salaried class who have come to Noida for work. They tend to be better tenants than local residents, who might use their power to threaten owners. I cannot risk it at this age,” he said.
What worries him, though, is the low rental yield – just 3.5% for his 2BHK+store property. “Sooner or later I’ll sell my apartment to put the lumpsum in FDs to get interest income. I also get some pension, and have invested in RBI bonds, SCSS (Senior Citizen Savings Scheme) and PMVVY (Pradhan Mantri Vaya Vandana Yojana),” he said.
Spreading out the risk
Some people prefer global diversification. Aditya Narayan Dubey (38) is a chartered account who lives in the UAE and has two flats on rent in Delhi. He plans to return to India in 7-8 years after retiring early. He has a property in the UAE, too. “I don’t want to rely only on my Indian properties for retirement income. I’m banking on UAE property because net rental yield is 6-7%. If the property market in India remains buoyant and the UAE market cools off , I’ll sell Indian property to buy another one in UAE,” he said.
He expects to get a total of ₹1 lakh in rent per month from his Indian and UAE properties. This, he says, will cover 45% of his retirement expenses while the rest will come from his stock market investments. “The rental growth in the UAE property and currency fluctuations will take care of inflation in India,” he said.
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Lalit Mukhi, also based in the UAE, did the same. He has a 3BHK townhouse property there, which he will rent out once he returns to India in a year or so. Managing the property from afar could be difficult, but Mukhi has planned it properly. “I lived in this property for a couple of years so I could get to know other people nearby. Meanwhile, I have built a network with maintenance companies. They will charge nearly 2% but will manage my property and any issues my tenants face,” he said.
The rental yield on his property is 10%. “The rental income from this property is ₹1.6 lakh a month, 70% of which goes into paying EMIs, while 30% is my cash-flow. It will make up 60% of my retirement expenses. The INR-AED currency fluctuations will take care of inflation. I also have some investments in the stock market,” he said.
What about the risk of a tenant forcefully occupying their property when they are in India? The dispute centre in the UAE protects both owners and tenants. “I need to give a notice period of one year to tenants to leave my apartment, while they can serve a notice period of two months when they have to leave. I must have a strong reason to evict them. I cannot do it simply because I want a new tenant. I can do it only if I want to stay there, to renovate it, or to give it to a relative. If the reason is valid, the tenant will have to leave, or the dispute centre will take action,” Mukhi said.
How to protect yourself
Not everyone has the means to diversify their investments globally. In the context of Indian real estate, especially rental properties, a well-drafted and legally enforceable rental agreement is essential.
However, legal experts caution that property owners often do not take rental agreements seriously. Most owners rely on property agents who typically use generic, outdated 11-month lease templates. There is also a widespread misconception that registration is only required for agreements exceeding a year. This is incorrect.
“Under Indian law, any lease agreement that involves possession of property for more than 11 months must be registered to be legally valid and admissible in court. Failing to do so can weaken the owner’s legal standing in case of disputes,” said Rajeev Kr. Mishra, advocate, SRM Legal.
“In many instances, property agents procure a pre-notarised, standard agreement and have it signed without the physical presence of either party, often using vague or poorly drafted clauses. When such an agreement is neither properly executed nor entered into the notary’s official register, and the tenant later denies signing it, proving the existence of a landlord-tenant relationship becomes extremely challenging. This is further complicated if rent payments are made in cash, without receipts or proper documentation. In such scenarios, the burden of proof lies heavily on the landlord, escalating both the duration and cost of litigation,” he added.
“Registration is a straightforward process,” said Mishra. “You pay 2% of the annual rent as stamp duty, along with a nominal registration fee, which varies from state to state. In addition, there may be a lawyer’s fee for drafting or reviewing the agreement.”
Who bears the cost of registration? “Legally, the responsibility lies with the tenant. However, in practice, both parties usually share the cost equally,” he said.
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If someone has already occupied your property, it’s crucial to follow the proper legal procedure for eviction. “The first step is to issue a legal notice to the tenant, following which you must file an eviction suit in court, accompanied by an application under Section 151 of the Code of Civil Procedure (CPC). This application requests the court to direct the tenant to deposit the outstanding and current rent either with the landlord or directly with the court before being allowed to present a defence,” Mishra said.
“Most landlords are unaware of this provision. If the court grants the application and the tenant is ordered to deposit the due rent, it significantly strengthens the owner’s position, often leaving the tenant with little ground to contest the case,” he added.
If the tenant refuses to pay the outstanding rent or vacate the property despite a court order, the owner can file a contempt of court petition in the high court. “While tenants may disregard civil suits, the threat of criminal proceedings, like contempt of court, usually ensures compliance,” he said.
Important ruling on adverse possession
Mishra also highlighted an important ruling in the context of long-term tenants occupying the owner’s property, which is known as adverse possession. To be sure, an owner may lose the right to his property after a specific period if he fails to take action to recover it. Under Section 27 of the Limitation Act, 1963, this period is 12 years for private property and 30 years for the government property.
“Until around 7-8 years ago, most judgements used to be in favour of tenants in this context, but in 2024, the Delhi High Court ruled in Satya Pal Pathak vs Vijay Kumar Kaushik that the landlord is the best judge of his requirements. It is not for the courts to dictate how a landlord should live. The tenant was given six months to vacate the owner’s house. So legal precedents are there even in cases of adverse possession,” Mishra said.
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