Maharashtra Ends the Century-Old Pagdi System with New Legislation
Maharashtra’s decision to introduce a separate regulatory framework to dismantle the century-old Pagdi system marks a major shift in Mumbai’s housing landscape. Announced by Deputy Chief Minister Eknath Shinde, the move seeks to resolve long-standing disputes between tenants and landlords while accelerating redevelopment of ageing buildings across the city.
What Is the Pagdi System?
The Pagdi system is a pre-Independence rental arrangement that became common in Mumbai before the 1940s and continues to be recognised under the Rent Control Act. Under this system, tenants pay a large one-time premium, known as pagdi, to landlords at the time of entry. In return, tenants receive near-permanent occupancy rights. Monthly rents remain extremely low and have often stayed unchanged for decades. In some cases, tenants also received a partial ownership stake, though legal ownership usually remained with the landlord. Tenancy rights could be resold, with proceeds shared between tenant and landlord.
Why the System Became Problematic
Over time, the Pagdi system created severe economic and legal distortions. Landlords earned negligible rent, often insufficient even to cover property taxes or basic maintenance. As a result, many Pagdi buildings deteriorated into unsafe structures. Redevelopment stalled because landlords lacked incentives, while tenants feared displacement or loss of rights. The system also encouraged opaque cash transactions, contributing to black money circulation and revenue loss for the state. Ambiguous laws further left tenants uncertain about their entitlements during redevelopment.
What the New Law Proposes
The proposed framework aims to balance interests by redefining rights and obligations. Tenants are expected to receive a clearer stake or ownership share in redeveloped properties, addressing long-standing insecurities. Landlords, on the other hand, may become eligible for fair compensation, revised rents, or redevelopment benefits that make projects financially viable. A dedicated regulatory mechanism is also expected to reduce litigation, standardise processes, and bring transparency to transactions.
Exam Oriented Facts
- The Pagdi system predates India’s Independence and is recognised under rent control laws.
- Rents under Pagdi tenancies are far below current market rates.
- Mumbai has thousands of ageing Pagdi buildings awaiting redevelopment.
- Redevelopment disputes under Pagdi laws often lead to prolonged court cases.
Who Gains More: Tenant or Landlord?
The new law appears designed to ensure mutual gains rather than favour one side outright. Tenants benefit from legal clarity, security, and potential ownership in safer homes. Landlords gain financial viability, redevelopment incentives, and relief from decades of frozen rents. If implemented effectively, the biggest beneficiary could be Mumbai itself, as redevelopment of Pagdi properties is expected to revitalise the real estate sector and improve urban safety.
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Om Prakash Agrawal
December 13, 2025 at 10:04 amWhats the new law
Samantha M
December 14, 2025 at 10:45 amAs I read this I found that says landlords find it difficult to maintain builds and pay property taxes. I stayed in a pagadi house over the years, taxes being payed by the tenants maintainance of the building in and out is done by the tenants at their own cost and here the landlords demands thousands if any internal repairs and painting is done. Is this legal/ right? I even told the landlord he has the right to increase the rent but with proper legal way. He build rooms on the terrace which are rented out but does not pay nor have payed for the basic maintainance and water charges for which the motor and line connection have been paid by the tenants.MeDombovlikar.
Vipul patwa
December 13, 2025 at 10:30 amThanks please update me only on pagdi laws.
MUKESH DEDHIA
December 13, 2025 at 10:44 amMere Dada jee ne 1958 ko pagdi se do shop 175sqfeet 2 185sqfeet ka Andaya se liye hai abhi mere Dada jee 1975or mere pitajee 2010swargvash Hoya gaya. Abhi hamako landlord Rent nahi leta hai or boltta hai ki ap ye dono dukan ke tenant nahi hai mai meri matajee or 2bhai varasdar haiu.bhavishaya me redevelopment hoga to hamari kya surksha hogi
Pl batayenge .
Veronica fernandes
December 13, 2025 at 12:15 pmI am an adopted child of my parents both parents have passed away .Landlord has taken complete control over the house located at kanjurmarg -E . How to go ahead with this matter
Jiten
December 13, 2025 at 2:36 pmIn my opinion, from what you have asked, no one was staying with your late parents when they died and hence the property was lying vacant and that’s why the landlord has taken the possession. if you were staying with your deceased parents at the time of their demises, you are entitled to get the rent receipt transferred in your name if and only if you were continued staying in the said property even after their demised/s. Please consult a lawyer specialised in Rent Act.
Laxmi Sameer Ambilissery
December 13, 2025 at 5:42 pmFor the last 5 years my landlord is not taking rent from me my both parents passed away and the Land lord wants to vacate the house which we have been staying for past almost 60 years
Prabha
December 13, 2025 at 4:27 pmFirst of all landlord have to rights to remove the tenant..
All records of tenant shld be with bmc as well as mahada .
Dictatorship of landlord must close down and mahada or bmc shld take over all building and do redevelopment immediately .Landlord dnt need fsi he devil eyes are always on whole property itself..
Remove all landlord first .
Perviz Colah
December 13, 2025 at 5:04 pmLandlord is not transferring rent receipt jn my name since my sister died in 1998 and staying in the same house since past 80 years. I have also agreed to pay the transfer charges but mot receiving suitable reply.
Laxmi Sameer Ambilissery
December 13, 2025 at 5:37 pmFor the last 5 years my landlord is not taking rent from me my both parents passed away and the Land lord wants to vacate the house which we have been staying for past almost 60 years
Pls help
Kalpesh
December 13, 2025 at 5:55 pmHey i am Kalpesh
Muje maharashtra rent control act 16 ka case chal rha hai 2017se Bandra small court me or case karne vala Rakeshkumar dalsingar singh hai or uske pas nahi property Card hai or nahi 7/12 me uska naam hai fir bhi woh apne aapko jamin kaa malik bol rha hai or Bandra small court usme koy karyavai nahi kar rhi or hamara paisa case me barbad ho rha hai case no 335 of 2017 hamare desh kaa sabhi kanum bohot galat hai aam aadmio ke liye koy bhi Kanoon nahi hai bass ghuspeti yo ke liye kanoon hai mene court me property paper or 7/12 utara bhi dala hai fir bhi case chal rha document se clear pata chal rha hai rakeshkumar dalsingar singh landlord nahi hai fir bhi date to date mil rha hai
Patel
December 13, 2025 at 9:24 pmThis law applicable for chawl system
Jugraj
December 13, 2025 at 9:55 pmWe are tenants from 1995 in pagdi system. As family grows one of my son shifted to new house. Now landlords ask for bona-fide rights to vacant the flat. The case is jn court since 2001. The bldg is jn dilapidated condition. What happens if c category notice being served by bmc..The case will dissolve?