House Rent Provisions in Nepal: Rights, Duties, and Legal Procedures

The house rent provision in Nepal is an essential part of the country’s urban housing and tenancy system, aimed at regulating the relationship between landlords and tenants to ensure fairness, security, and mutual respect. As urbanization rapidly increases, particularly in major cities like Kathmandu, Lalitpur, and Pokhara, the demand for rental housing has surged, making house rent laws increasingly significant. Governed primarily by the National Civil Code, 2074 (2017), Nepal’s house rent provisions outline the legal obligations and rights of both landlords and tenants. These include clear guidelines on rent agreements, advance payments, rent increments, contract termination, and the maintenance of the rented property. The law seeks to prevent arbitrary rent hikes, unfair evictions, and exploitation of tenants while also protecting landlords' property rights. It mandates that rental agreements should ideally be in writing to ensure transparency and minimize disputes. Additionally, local government authorities are often involved in rent-related conflict resolution. Overall, the house rent provision in Nepal plays a vital role in promoting stability and legal order in the rental housing market, benefiting both tenants and property owners.

Legal provision relating to house rent in Nepal.

1. Definition of House Rent (Section 383 of Muluki Civil Code)

A house is considered rented when the owner, possessor, or legal right-holder allows another person to use the property for a specific time in exchange for rent. This definition includes not just entire houses but also individual floors, rooms, or even open land associated with the house. This broad interpretation ensures that all types of rental arrangements, whether large or small, fall under the protection of the law.

2. Prohibition of Renting Unsafe Houses (Section 384 of Muluki Civil Code)

It is strictly prohibited to rent out houses that are not safe for human habitation. Safety is judged based on structural integrity, sanitation, and the general health environment. For non-residential purposes like warehouses, livestock farms, or storage, specific safety standards must be clearly agreed upon in the rental contract. This provision is essential to prevent landlords from renting dangerous buildings that may collapse or harm the tenant’s health.

3. House Rent Duration (Section 385 of Muluki Civil Code)

The law limits rental agreements to a maximum of five years for residential purposes. However, for commercial rentals, the duration can be freely negotiated. After the original term, both parties may agree to extend the rental period as needed. This limitation helps both landlords and tenants periodically reassess rental conditions, adjust terms, or safely terminate agreements.

4. Written Rental Agreement (Section 386 of Muluki Civil Code)

A written rental agreement is mandatory when the monthly rent exceeds NPR 20,000. This agreement must include detailed information such as the names, addresses, citizenship details, property location, purpose of rent, rent amount, payment schedule, tax responsibilities, insurance terms, subletting conditions, and more. Both the owner and the tenant must sign the agreement in the presence of at least two witnesses each, and the tenant’s photograph must be attached. This documentation protects both parties from future disputes and ensures clarity.

Following should be addressed while making an agreement :-

• Full name and address of the owner and of the tenant,
• Their citizenship number, and passport or identification certificate,
• In the case of a foreigner, Place and plot number of the land where the house is located,
• Purpose for rent,
• Date of commencement of rent,
• Validity period of rent,
• Monthly rent,
• Time and mode of payment of rent,
• Liability to pay tariffs of electricity, water supply, telephone etc. used in the house,
• Matter on payment of house rent tax,
• If the rented house is to be insured, matter relating thereto,
• Matter on leaving the rented house and eviction of the tenant from it,
• Matter as to whether the rented house can be sublet to another, and

5. Disclosure of House Condition (Section 387 of Muluki Civil Code)

The house owner is legally required to inform the tenant about any structural issues, faults, or weaknesses in the house before signing the rental agreement. This ensures that tenants are fully aware of the risks and can make informed decisions about their safety and living conditions.

6. Inventory of Goods (Section 388 of Muluki Civil Code)

If the house is rented with furniture or other goods, the owner must prepare a complete inventory list. The tenant must receive and acknowledge this list in writing. This prevents future misunderstandings about the condition and ownership of these goods when the tenancy ends.

7. Obligations of the House Owner (Section 389 of Muluki Civil Code)

The house owner must:

• Allow tenants to fully use the property as agreed.
• Ensure access to essential services like water, electricity, sanitation, unless otherwise stated in the contract.
• Provide a peaceful and harassment-free living environment by preventing other residents from disturbing the tenant.
• Follow all responsibilities mentioned in the rental agreement.

8. Obligations of the Tenant (Section 390 of Muluki Civil Code)

Tenants are required to:

• Pay rent on time as agreed.
• Maintain cleanliness and take care of the property as if it were their own.
• Respect the peace of other tenants and neighbors by not causing disturbances.
• Respect the peace of other tenants and neighbors by not causing disturbances.

9. Payment Procedure (Section 391 of Muluki Civil Code)

The tenant must pay rent following the method and schedule defined in the agreement. If not specified, rent should be paid within seven days after each month ends. Rent can be paid in cash or by cheque, and landlords must provide receipts for cash payments to maintain transparency and avoid payment disputes.

10. Tax and Other Charges (Section 392 of Muluki Civil Code)

Unless otherwise agreed, the landlord is responsible for paying taxes and government-imposed charges related to the property. If the landlord fails to do so, the tenant can make the payment and legally deduct the amount from their rent. This provision ensures that properties remain legally compliant and tenants are not penalized for the landlord’s negligence.

11. House Insurance (Section 393 of Muluki Civil Code)

Tenants using a rented house for industrial or commercial purposes must insure the property against risks like fire, riots, or natural disasters. If the tenant fails to insure the house and it gets damaged, the tenant will be held liable. This protects the landlord’s property and encourages responsible business practices.

12. House Repairs and Maintenance (Section 394 of Muluki Civil Code)

Generally, unless stated otherwise in the rental agreement, the tenant is responsible for the repair and maintenance of the rented house. However, if the agreement clearly states that the house owner is responsible for maintenance, the tenant must inform the owner in writing when repairs are needed.

If the house owner fails to conduct the required repairs even after receiving written notice, the tenant is allowed to carry out the repair work on their own. In such cases, the tenant can deduct the repair expenses from the rent they owe to the house owner.

Before proceeding with the repair, the tenant must prepare a detailed cost estimate and send it to the house owner at least 15 days in advance, unless the agreement provides different terms. This provision ensures fairness and gives the house owner an opportunity to respond before the tenant takes action.

13. Subletting Rules (Section 395 of Muluki Civil Code)

A tenant can sublet the whole or part of the rented house to another person only if the rental agreement with the house owner explicitly allows it. After subletting, the tenant must inform the house owner in writing within 15 days, providing the sub-tenant’s name and address.

The sub-tenant is required to pay rent to the primary tenant (not directly to the house owner) and must follow all the same rules and responsibilities as the original tenant, including maintaining cleanliness, protecting the property, and avoiding disturbance to others.

If the sub-tenant violates the terms of the agreement, causes damage, or harasses other residents or neighbors, the primary tenant has the right to evict the sub-tenant at any time to maintain peace and order in the house.

14. Restriction on Structural Changes (Section 396 of Muluki Civil Code)

Tenants cannot make structural changes like demolishing walls or adding rooms without the landlord’s written approval. Any unauthorized changes that cause damage must be compensated by the tenant. This protects the structural integrity and value of the property.

15. Prohibition of Unauthorized Use (Section 397 of Muluki Civil Code)

Tenants are not allowed to use the house for any purpose other than what is stated in the agreement, such as using a residential house for industrial work, without the landlord’s consent. Violating this can lead to legal eviction.

16. Amendments to the Agreement (Section 398 of Muluki Civil Code)

The landlord and tenant can mutually agree to change the terms of the rental agreement. If the agreement is officially registered, both parties must apply to the concerned authority to update the changes.

17. Owner's Right to Inspect (Section 399 of Muluki Civil Code)

The landlord has the right to inspect the house from time to time, provided they give advance notice to the tenant. The tenant must allow the inspection. This ensures landlords can monitor the condition of their property while respecting the tenant’s privacy.

18. Tenant's Right to Leave (Section 400 of Muluki Civil Code)

A tenant has the right to leave the rented house before the rental period ends in the following situations:

• If the house owner fails to fulfill their obligations, such as providing basic services or ensuring peaceful living.
• If the tenant no longer needs the house for the purpose for which it was rented.
• If the house owner violates the terms of the rental agreement or the house rent law.

In cases where the tenant leaves because they no longer need the house, they must provide at least 35 days’ written notice to the house owner, unless the agreement specifies otherwise.

If the tenant leaves without giving proper notice, the house owner has the right to deduct rent for the notice period from any advance rent paid. If no advance rent was paid, the owner can claim the outstanding rent amount from the tenant.

19. Owner's Right to Evict (Section 401 of Muluki Civil Code)

A house owner can evict a tenant under the following conditions:

• If the tenant fails to fulfill their obligations, such as timely rent payment or proper house maintenance.
• If the tenant engages in illegal activities within the rented property.
• If the house owner needs the house for personal use.
• If major repairs or renovations require the house to be vacated.
• If the house is declared unsafe or unfit for human habitation.
• If the rental period has expired.
• If the tenant violates the terms of the rental agreement or the house rent law.
• If subletting rules are breached.

When evicting for personal use, the house owner must give the tenant at least 35 days’ written notice.Additionally, the owner cannot rent the house to another person within three months unless they use it themselves. If they decide to re-rent the house within that period, the previous tenant must be given priority. This provision protects tenants from unfair eviction and ensures landlords use the property genuinely for their own needs.

20. Termination of Agreement (Section 402 of Muluki Civil Code)

A rental agreement ends if:

• The tenant leaves the house.
• The landlord evicts the tenant.
• Both parties agree to cancel the contract.
• The rental term expires.

Once terminated, neither party can enforce the previous rental terms.

21. Return of Property in Good Condition (Section 403 of Muluki Civil Code)

When leaving, the tenant must return the house in good, clean condition. The tenant must account for all furniture or goods provided and compensate for any losses or damages, except for items naturally worn out through normal use.

22. Vacating Abandoned Houses (Section 404 of Muluki Civil Code)

If a tenant disappears without paying rent for three months or more and cannot be located despite public notices or attempts to contact them, the house owner can request assistance from the local ward office to vacate the house.

The ward office will issue a public notice giving the tenant 15 days to appear. If the tenant fails to respond within this time, the ward office can open and vacate the house and safely keep the tenant’s belongings in custody.

If the missing tenant or their representative returns within six months, they can claim their goods after paying the due rent.If the ward office does not act within one month, the house owner can approach the ward office and nearby police, open the house in the presence of police and two local witnesses, and hand over the tenant’s belongings to the police for safekeeping. This process provides a legal, step-by-step method for house owners to reclaim their property when tenants abandon it without notice

23. Statute of Limitations (Section 405 of Muluki Civil Code)

If either party has a complaint regarding house rent matters, they must file a legal case within six months from the date the issue occurred. This time limit encourages timely dispute resolution and protects both parties from indefinite liability.

The house rent provisions in Nepal, as outlined in the Muluki Civil Code, 2074 (2017), play a critical role in establishing a balanced legal framework that safeguards the rights and responsibilities of both landlords and tenants. These laws ensure fair agreements, proper maintenance, transparent rent payments, and protection against exploitation or sudden eviction. They also provide clear procedures for handling abandoned properties, subletting, house repairs, and resolving disputes, which promotes stability and accountability in the rental market. Provisions such as written contracts, tax obligations, insurance requirements, and safety standards help minimize misunderstandings and protect both parties' interests. Additionally, the involvement of local authorities in conflict resolution strengthens the system's fairness. Overall, Nepal’s house rent laws contribute to creating a more organized, secure, and tenant-friendly urban housing environment while equally respecting the rights of property owners, supporting the growing demand for rental housing in Nepal’s rapidly urbanizing cities