Handshake Deals Are Out, Digital Leases Are In: Why India’s Rental Market Needs A Reset

The digitalisation of rental contracts is a natural response to the shifting demands of India’s young mobile and tech-savvy tenant base.

The way digital rental contracts work is fairly straightforward, but incredibly impactful.

Source : Freepik

By Manoj Srivastava

India’s rental market has long operated in a fragmented, opaque fashion, often characterised by handshake deals, loosely worded paper agreements, and a deep mistrust between landlords and tenants. This status quo is inefficient, unaccountable, and incompatible with the digital economy we aspire to build. If India wants to see a real transformation in urban housing and rental accessibility, the foundation structure of rental agreements must evolve. One of the most powerful and underutilised tools in this evolution is the digital landlord-tenant contract.

A digital landlord-tenant contract is exactly what it sounds like: it is a legally binding rental agreement between a property owner and a tenant that is created, executed, and stored electronically. Unlike traditional rental agreements that are drafted manually and stored physically, digital contracts are securely generated online, time-stamped, digitally signed, and easily retrievable on demand. When integrated into modern property management systems, these contracts can also link directly to lease cycles, rent payments, tenant communications, and maintenance logs, hence creating a complete ecosystem of trust and traceability. 

How Do Digital Rental Contracts Work?

The way digital rental contracts work is fairly straightforward, but incredibly impactful. Both the landlord and the tenant verify their identities digitally using Aadhaar or similar KYC tools. A standardised rent agreement is compliant with the local laws of the respective state and is populated using pre-validated templates. Parties can negotiate terms digitally, make changes in real time, and once finalised, the document is digitally signed and legally valid under the Information Technology Act, 2000. In some jurisdictions, optional e-stamping and online registration further reduce paperwork and bureaucratic delays. 

The advantages of moving to digital contracts are substantial. First and foremost is accountability. Every interaction, whether it is payment schedules, maintenance responsibilities, or notice periods, everything is documented and time-stamped, eliminating ambiguity. Secondly, digital contracts significantly reduce the scope of disputes, since terms are clear, non-negotiable post-signing, and always accessible. Third, there is scalability. For institutional landlords or real estate managers handling properties in large numbers, managing contracts digitally is not just convenient, it is a necessity. From an operational standpoint, digital contracts also enable automated alerts for renewals, breach conditions, and rent adjustments, creating a proactive management layer that traditional contracts simply cannot offer. 

Reducing Risks

The digitalisation of rental contracts is a natural response to the shifting demands of India’s young mobile and tech-savvy tenant base. These contracts offer unmatched speed and convenience, allowing the entire leasing process beginning from drafting to signing, to be completed online. Real-time identity verification and embedded legal compliance mechanisms reduce the risk of forgery and disputes. 

Integrated features such as automated rent collection, renewal alerts, and compliance reminders streamline operations for landlords while improving transparency for tenants. In a post-pandemic landscape where remote access and digital-first solutions have become the norm, these capabilities are not conveniences; rather, they are essential infrastructure for the future of renting.

That said, the transition is not without challenges. One concern is digital literacy and access. While urban landlords and tenants may adapt quickly, in semi-urban or rural markets, awareness and infrastructure are still catching up. There is also the matter of legal uniformity. Rental laws in India differ from state to state, and not all jurisdictions have yet embraced the online registration of rent agreements, which limits the full potential of digital adoption. Finally, there’s the issue of data privacy. Handling sensitive tenant and financial data requires robust encryption, secure servers, and full compliance with India’s data protection frameworks.

Easy To Create, Easy To Manage

Despite these hurdles, the benefits far outweigh the limitations. The encouraging reality is that digital landlord-tenant contracts are not reserved for large corporations or tech-savvy landlords. With intuitive digital platforms and increasing government support, even an independent homeowner renting out a single unit can now not just create and manage but also renew rental agreements online. The technology exists, the legal validity is well established, and the user experience is being designed to be simple, secure, and accessible across geographies.

India is undergoing a generational shift on the whole, and it is visible in how we live, rent, and invest in property. To match this shift, our systems must be equally transformative. Digital landlord-tenant contracts are not just a convenience but now a necessity to build transparency, trust, and scalability in India’s growing rental ecosystem.

(The author is the Managing Director of Rentilium)

Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd.