India’s Tenancy Laws: Lease Ends with Notice, But Failure to Return Keys Can Trigger Occupation Charges

India’s Tenancy Laws: Lease Ends with Notice, But Failure to Return Keys Can Trigger Occupation Charges

Indian courts clarify rent stops with lease expiry, but landlords may claim mesne profits for wrongful possession

Transfer of Property Act and Rent Control Acts guide disputes over key handover and tenant obligations

By Our Legal Reporter

New Delhi: December 03, 2025:

Tenancy disputes are common across the world, and India is no exception. A recent French Supreme Court ruling held that tenants who fail to return keys at the end of a lease cannot be charged rent beyond the notice period, though landlords may claim compensation for wrongful occupation. Interestingly, Indian tenancy laws follow a similar principle: rent obligations end with the expiry of the lease, but if tenants fail to hand back possession—including keys—landlords can seek mesne profits or occupation charges.

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This article explores how Indian tenancy laws address the issue of key handover, lease termination, and landlord remedies.

Legal Framework in India

India’s tenancy laws are governed by:

• Transfer of Property Act, 1882 (TPA): Provides the general framework for leases, termination, and possession.
• State Rent Control Acts: Each state has its own law regulating rent, eviction, and tenant rights.
• Judicial precedents: Courts have clarified how possession and key handover affect rent liability.

Lease Termination and Rent Liability

Under Indian law:

• A lease ends when the agreed term expires or when proper notice is given under Section 106 of the TPA.
• Rent obligations stop once the lease ends.
• If tenants continue to occupy or fail to return possession, landlords can claim mesne profits (compensation for wrongful occupation).

This is like the French ruling: rent is contractual, while mesne profits are compensatory.

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Importance of Returning Keys

In India, courts often treat the return of keys as symbolic proof of handing back possession. However, the absence of keys does not automatically extend rent liability. Instead:

• If tenants keep keys but do not occupy, landlords may still argue possession was not surrendered.
• Courts examine evidence such as electricity bills, furniture left behind, or inspection reports.
• If wrongful possession is proven, landlords can claim occupation charges.

Judicial Precedents in India

Several Indian cases have clarified this issue:

• Supreme Court of India (1996): Held that once lease expires, rent cannot be claimed, but mesne profits apply if possession is not surrendered.
• Delhi High Court (2019): Ruled that mere expiry of lease does not end liability if tenant retains control of property.
• Bombay High Court (2021): Emphasized that key handover is important evidence of surrender, but not the sole determinant.

Implications for Tenants

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For tenants, the law provides protection but also responsibilities:

• Rent stops with lease expiry, but failure to return possession can lead to occupation charges.
• Tenants should ensure proper handover, including keys, inspection, and documentation.
• Delays in returning keys may weaken their defense in court.

Implications for Landlords

For landlords, the ruling means:

• They cannot claim rent beyond lease expiry.
• They can claim mesne profits for wrongful occupation.
• Proper documentation—such as key receipts, inspection reports, and notices—strengthens their case.

Comparison with France

The French Supreme Court ruling (September 2024) clarified that rent stops with notice, not with keys, but landlords can claim occupation indemnity. India’s approach is similar:

• Rent ends with lease expiry.
• Compensation applies if possession is not surrendered.
• Courts rely on evidence beyond keys to decide disputes.

Practical Guidance for Tenants in India

To avoid disputes, tenants should:

• Give proper written notice under Section 106 TPA.
• Request a formal check-out inspection.
• Hand over keys with a signed receipt.
• Clear utility bills and remove belongings.
• Keep copies of all documents.

Broader Lessons

The Indian framework highlights the distinction between:

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• Contractual rent liability, which ends with lease expiry.
• Compensatory occupation charges, which apply if tenants fail to surrender possession.

This separation ensures fairness: tenants are not unfairly burdened with rent, but landlords are compensated for wrongful occupation.

Conclusion

India’s tenancy laws mirror global principles. Rent stops with lease expiry, but failure to return keys or possession can trigger mesne profits. The law balances tenant rights with landlord remedies, ensuring fairness in disputes.

As urban rental markets expand, clarity on such issues is vital. Both tenants and landlords must adopt formal procedures—written notices, inspections, and key receipts—to avoid costly litigation.

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