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HomeDocumentsDocument Guides › Paying Guest Agreement

Paying guest agreement — house rules, deposits and exits that do not end in a fight

A student in Mukherjee Nagar leaves her PG after the exams and waits three months for a deposit that comes back short by half, for “painting”. An owner in Laxmi Nagar has a resident who stopped paying in March and will not leave, and discovers he does not know whether he is a landlord or a host. A working woman in Kalkaji is told the gate now closes at nine, though nothing was said when she joined. PGs run on trust and routine, and most of the time that is enough. When it is not, the only thing either side can point to is what was written down. This page explains what a PG agreement should say, for the person running the PG and for the person living in it.

From ₹999 Same day – 2 days For PG owners, operators and residents Nothing payable in advance
What is a paying guest agreement, and what should it contain?A paying guest agreement is the contract between the owner or operator of a PG and a resident who pays to occupy a room or a bed, usually with meals and services. Because the operator keeps control of the premises, provides services and retains a right of access, the arrangement is ordinarily a licence rather than a tenancy, which affects how it can be ended. The agreement should identify the room and bed and whether it is shared; the monthly charge and exactly what it includes — meals, electricity, Wi-Fi, cleaning, laundry; the due date and late fee; the security deposit, the permitted deductions and the refund date; house rules on entry time, visitors, kitchen use, noise, smoking and alcohol; the operator’s right of access; responsibility for belongings; the notice period on both sides; and what happens at exit, including an inventory check. In Delhi the operator should complete police verification of every resident, and the agreement should be stamped. Local licensing and fire safety requirements depend on the building and size of the PG, and income from a PG may be taxed as business income, with GST exemptions for long-stay accommodation below a monthly threshold.

What a PG agreement is for

Paying guest accommodation fills a gap between a rented flat and a hostel. A student who has come to Delhi for coaching, a young professional on a first job, a nurse on hospital shifts, a trainee on a six-month posting — none of them wants to sign an eleven-month lease for a whole flat, buy furniture and set up a kitchen. A PG gives them a bed, often meals, cleaning, Wi-Fi and security, for one monthly charge.

The arrangement is usually informal: a WhatsApp conversation, a visit, a deposit paid by UPI, a key handed over. That works while everyone is happy. Problems arise at predictable points — when the charge rises, when a new rule appears, when a roommate changes, when something goes missing, and above all when someone leaves and the deposit is settled.

A written agreement does not replace goodwill, but it does three useful things. It tells the resident, before they move in, exactly what they are paying for and what rules they are accepting. It gives the operator a clear basis for enforcing rules and deductions without argument. And it fixes the legal character of the arrangement, which matters if a resident refuses to leave.

For operators with several residents, a standard agreement with a house-rules schedule and an inventory form, used for every resident, turns a stream of individual disputes into a routine. For residents, reading the agreement before paying the deposit is the best protection they have: once the money is paid, the negotiating position is gone.

This page is written for PGs in residential buildings in Delhi, but most of it applies anywhere in India. It does not repeat the general law on licences and rent agreements, which our leave and licence guide and rent agreement guide cover; it focuses on what is specific to paying guests.

Licence, not tenancy — and why it matters

A tenant has exclusive possession of the premises let to him. A licensee has only permission to use premises that remain in the possession and control of the owner. The distinction is old and sometimes blurry, but a typical PG falls clearly on the licence side:

Why it matters: a licence can be ended by the licensor on the notice the agreement provides, and a licensee does not acquire the protections a statutory tenant may have. That is simpler for the operator. But “simpler” does not mean “by force”: a licensee who stays on after the licence ends must still be removed lawfully. Our leave and licence guide explains the tests courts apply, and its section on Delhi explains why rent control is rarely the real issue now.

The label on the document does not decide the question; the substance does. An agreement called a “PG agreement” that gives a single occupant a whole self-contained flat, with no services and no access, may be a tenancy whatever it is called. Operators who want the licence position should run the PG as a PG.

Where an owner lets an entire flat to a group of friends who share it, with no services, that is an ordinary rental and a rent agreement is the right document; our rent agreement service drafts it.

Kinds of PG, and which document fits

Swipe to see the full table
ArrangementWhat the resident getsSuitable document
Room in a family homeA room, shared bathroom, meals with or from the familyShort PG agreement with house rules
Owner-run PG buildingBed or room in a building run as a PG, meals, cleaningStandard PG agreement and rules schedule
Operator-run PG (operator has leased the building)As above, run by a businessPG agreement with the operator; operator’s own lease with the owner
Student hostel run by or for an institutionBed, meals, supervision, institutional rulesHostel accommodation agreement
Co-living brandFurnished room, app-based services, community spacesOperator’s licence agreement and terms
Whole flat shared by friendsExclusive possession of the flatRent agreement

Where an operator runs a PG in a building it has itself taken on lease, there are two documents: the operator’s lease with the owner, and the operator’s agreements with residents. The operator’s lease should expressly permit use as a PG and sub-licensing to residents; otherwise the owner may treat it as a breach. Residents in such a PG should know that if the operator’s lease ends, their own arrangement may end with it.

For institutional student hostels, the rules and supervision obligations are different enough to justify a separate document; our hostel accommodation agreement service drafts those.

Who signs

The operator. The owner of the premises if the owner runs the PG, or the operator business if someone else runs it. The operator’s full name, address and contact number, and for a business its registered name, should appear.

The resident. Full name, permanent address, identity proof, a recent photograph, and emergency contact.

A guardian, for any resident under eighteen, and often by agreement for young students even if adult, to take responsibility for charges and to be contacted in emergencies. The section on students below explains why.

An employer, where the employer pays for or arranges the accommodation, may sign a separate letter confirming payment responsibility.

Each resident should sign an individual agreement, even when several friends move in together. A single agreement signed by a group creates confusion about who owes what when one of them leaves.

The operator should keep a signed copy, and give one to the resident. A photograph or scan on the phone is not a substitute for a signed copy in the resident’s hands.

The room, the bed and the sharing

A PG agreement should say precisely what the resident is getting, because “a room” in a PG can mean several different things.

Room changes are a frequent source of friction. An operator needs flexibility to fill beds; a resident who chose a double room with a particular person does not want to find a stranger in it. A fair clause allows the operator to allocate an empty bed in a shared room, gives the resident notice, and allows the resident to leave without penalty if the change is unacceptable.

Where the resident is allowed to bring furniture or appliances — a small fridge, an induction cooker, an extra heater — the agreement should say so, with any extra electricity charge. Where they are not, the rule should be in writing.

The inventory, signed at move-in with dated photographs, is the single most useful document at exit.

The monthly charge and what it includes

“Rent” in a PG usually covers much more than rent, and disputes arise when the two sides assume different things.

The agreement should state:

Payments should be made by bank transfer or UPI, and the operator should give receipts. Receipts help the operator show income for tax, and help residents show accommodation costs for their employer’s allowance claims.

Charges collected in advance should be treated as the charge for the coming month, not as an additional deposit, unless the agreement clearly says otherwise.

Meals

Meals are the service residents talk about most and agreements describe least. A PG that includes food should say:

An operator providing meals on a commercial scale should also consider food safety registration or licensing requirements that apply to food businesses; the threshold depends on the scale of the operation.

For residents, the menu is not usually part of the contract, but a reasonable description of the standard — home-style meals, a weekly menu displayed — sets expectations. Complaints about food quality are best handled by a named person and a simple feedback route, rather than argued about at the time of the deposit refund.

Electricity, water and Wi-Fi

Electricity is the second most common PG dispute after deposits, particularly in summer.

Included, or charged separately. Some PGs include electricity in the charge; others include it up to a number of units and charge above that; others charge each room by its own sub-meter. The method should be written into the agreement, with the rate per unit.

Air conditioning. Where rooms have air conditioners, electricity for them is often charged separately by sub-meter. The agreement should say how readings are taken, when, and how disputes about readings are resolved.

Rate. In Delhi, the electricity regulator’s rules govern supply by distribution companies to consumers, and questions have arisen about how much landlords and operators may charge occupants for electricity supplied through sub-meters. Operators should charge at a rate they can justify by reference to the actual tariff on their bill, and should check the current regulatory position rather than adding a margin.

Water. Usually included. If the building relies on tankers or has limited supply, the agreement should say how shortages are handled.

Wi-Fi. Speed, limits and the operator’s responsibility when it is down. Operators should keep the connection in their own name and set acceptable use rules, because unlawful activity on a shared connection can be traced to the account holder.

Power backup, if promised, should be described: which points it covers, and for how long.

Get a PG agreement with clear charges

Security deposit and deductions

Most PG disputes end at the deposit. Both sides can avoid them by writing down, at the start, exactly how it works.

Amount. There is no statutory cap for PG accommodation in Delhi; one or two months’ charge is usual. The agreement should state the amount, and that it carries no interest unless agreed.

What it secures. Unpaid charges at exit, damage to the room or furniture beyond normal wear and tear, lost keys or access cards, and, where the agreement provides, charges in lieu of notice.

What it does not cover. Routine painting and cleaning between residents, normal wear of mattresses and furniture, and the operator’s general maintenance. A clause that allows a fixed “maintenance deduction” from every deposit is effectively an extra charge and should be stated as such, if at all.

Evidence. Deductions for damage should be based on the move-in inventory and photographs, compared with the condition at exit, and itemised in writing with the cost.

Refund date. A fixed period after exit — for example, within seven or fifteen days — by bank transfer to the resident’s account. A deposit held indefinitely “until the new resident joins” is a common and unfair practice.

Using the deposit as the last month’s charge. Residents often want to adjust the deposit against the last month. Operators often refuse, because they then have no security for damage. The agreement should say which is allowed.

For operators, returning deposits promptly and fairly is also good business: reviews on listing platforms and word of mouth among students depend on it.

House rules

House rules are the part of a PG agreement that governs daily life. They should be attached as a schedule, signed by the resident, and displayed in the PG. They typically cover:

Three principles make house rules enforceable and fair. First, they must be given before the resident joins, not introduced afterwards without notice. Second, changes should be notified in writing with reasonable notice, and a resident who does not accept a significant change should be able to leave without penalty. Third, they must be applied evenly; a rule enforced against one resident and ignored for another invites a grievance.

Fines deducted from deposits for breach of house rules are a sensitive area. If fines are used at all, they should be modest, listed in the rules, and notified at the time of the breach, not collected as a surprise at exit.

Entry time, visitors and overnight guests

Entry time. Many PGs set a time after which the gate is closed, often justified by security. For adult residents, particularly working professionals with shift work, a rigid curfew can be impractical and resented. A workable approach is a gate-closing time with a simple procedure for late arrival — informing the warden, using an access card, or signing a register — rather than a lock-out. Whatever the rule, it must be in the house rules from the start.

Day visitors. Whether residents may receive visitors, where (common areas only, or rooms), during what hours, and whether visitors must sign in with identity.

Overnight guests. Most PGs prohibit overnight guests, or allow them only with permission and an extra charge. The rule matters for security and for the operator’s own verification obligations, because an unverified overnight guest is a risk the operator has not assessed.

Family visits. Parents visiting students, and whether they may stay.

Absence. Whether residents should tell the operator when they will be away overnight or longer. For student PGs this is often expected; for working adults it may be unnecessary, though it helps in emergencies.

Rules on visitors of the opposite sex in single-gender PGs are common. Whatever the operator decides, the rule should be clear, applied to everyone, and consistent with the safety purpose it serves.

Access, privacy and CCTV

A PG operator needs to enter rooms for cleaning, maintenance, safety checks and emergencies. A resident needs to know that their room is not open to anyone at any time. The agreement should reconcile the two.

CCTV in entrances, corridors and common areas is widely used and helps security. It must not cover rooms, bathrooms or changing areas. The house rules should say where cameras are, who can view recordings, how long recordings are kept, and when they are shared, for example with police investigating a complaint.

Personal data. Operators collect identity documents, photographs, phone numbers, guardians’ details and CCTV footage. Under the Digital Personal Data Protection Act, a business processing personal data has duties about purpose, security and retention. Copies of identity documents should be stored securely, used only for verification and records, and not shared or posted. Our DPDP guide explains those duties.

Belongings, lockers and theft

In shared rooms and busy buildings, things go missing. The agreement should set expectations on both sides.

Residents’ responsibility. Residents usually keep their belongings at their own risk and are expected to use the locker or lockable cupboard provided, keep their room locked when out, and not leave valuables in common areas.

Operator’s responsibility. The operator provides secure storage, controls access to the building, keeps a register of visitors and staff, and verifies staff. An operator whose negligence — a broken main door left unrepaired, unverified staff, a key given to the wrong person — causes a loss may be liable despite a general disclaimer.

When something is stolen. The resident should report it to the operator and, for anything significant, to the police; online lost or theft reports are available in Delhi. The operator should preserve CCTV footage and cooperate.

Belongings left behind at exit. The agreement should say how long the operator will keep items left after a resident leaves, how the resident will be contacted, and what happens after that period. An operator who disposes of belongings immediately, or holds them hostage for disputed charges, invites a complaint.

Parcels. Whether the operator will accept deliveries for residents, and on what terms.

Operators who provide lockers and a secure main door, and residents who use them, rarely end up arguing about liability.

Roommates and disputes between residents

In a shared room, the person who most affects a resident’s daily life is not the operator but the roommate. Many PG complaints are really roommate complaints: lights on at two in the morning, loud calls, borrowed belongings, a guest who stays too long, a smell of cigarettes in a no-smoking room.

The agreement cannot make roommates get along, but it can give everyone a process:

Operators should be careful not to take sides on hearsay. A short written note of each complaint, the response and the outcome protects the operator if a resident whose licence is ended later disputes it.

For residents, the practical advice is to raise problems early and in writing, through the channel the PG provides, rather than let them build until the only option is to leave and argue about the deposit.

Safety, fire and emergencies

PGs house many people in buildings that were usually designed for one family. Safety is not only a legal question; it is the operator’s first responsibility, and residents and parents increasingly ask about it before choosing a PG.

Fire. After a fire at a coaching centre in Mukherjee Nagar in 2023, Delhi authorities stepped up inspections of coaching centres and of PGs and hostels around them. Fire safety requirements depend on the height, area and use of the building; larger or taller buildings used for accommodation may need a fire safety certificate. Every PG, whatever its size, should have:

Structural and electrical safety. Extra rooms built on terraces or partitions in old houses should be checked by an engineer; exposed wiring and overloaded meters are common hazards.

Medical emergencies. The agreement should record an emergency contact for each resident, and authorise the operator to call a doctor or ambulance and inform that contact. Operators should keep a first-aid kit and the numbers of the nearest hospital.

Security. Working locks on the main door and rooms, lighting in entrances and stairs, verified staff, and a visitor register.

An agreement cannot make an unsafe building safe, and a clause purporting to exclude the operator’s liability for injuries caused by its own negligence is unlikely to protect it. The protection is in the precautions actually taken. Our landlord NOC service can help where the building owner’s consent is needed for safety works or PG use.

Verification, ID and records

Police verification. Delhi Police require verification of tenants and paying guests, and the requirement applies to PG residents as much as to tenants of whole flats. Verification can be done online through the Delhi Police citizen services or at the local police station, and should be completed for every resident before or at move-in. Our rent agreement guide and Delhi rent agreement guide explain the process, and our police verification service handles it for operators with many residents.

Identity and background. Operators commonly take a copy of a government identity document, a photograph, the permanent address, the name of the college or employer, and an emergency contact. For students, a college identity card or admission letter is useful.

Staff. Cooks, cleaners, wardens and security guards should also be verified. Residents are entitled to ask whether this has been done.

Records. A simple register — resident name, room, dates of joining and leaving, deposit received and refunded, and verification status — protects the operator if the police, a tax authority or a resident’s family ever asks.

Proof of address for residents. Residents often need to show their PG address for a bank account, a SIM card, a job, or a document application. A stamped PG agreement, a letter from the operator and, where necessary, an affidavit usually serve; our rent agreement guide explains what different authorities accept, and our address proof affidavit service prepares the affidavit.

The documents collected are personal data. They should be kept securely and destroyed after a reasonable period once the resident has left and all accounts are settled.

Students, minors and guardians

Many PGs in Delhi exist because of students: those at university campuses, and many more at coaching institutes in areas such as Mukherjee Nagar, Old Rajinder Nagar, Laxmi Nagar and Kalu Sarai. Student PGs raise particular points.

Minors. A person under eighteen cannot enter a binding contract on his or her own. Where a resident is a minor — common for students who move for coaching straight after school — the agreement should be signed by a parent or guardian, who is responsible for the charges and agrees to the rules on the minor’s behalf. Operators accommodating minors take on a greater duty of care in practice, and should think carefully about entry times, visitors, supervision and emergency procedures.

Guardian involvement for adult students. Many families want to be involved even when the student is over eighteen, and many operators prefer it. The agreement can name a local or home guardian as an emergency contact and, if the parties wish, as guarantor for payment. It should be clear what information the operator will share with the guardian, because an adult resident is entitled to privacy.

Academic calendar. Student PGs often need flexible terms: a lower charge or bed retention during vacations, exit at the end of a course or exam cycle, and notice that fits the academic year.

Study environment. Quiet hours, study rooms, reliable Wi-Fi and power backup matter more to student residents than to others, and the agreement or rules can promise them.

Parents choosing a PG for a child should visit, ask to see the agreement and rules before paying, check fire safety and verification, and speak to current residents.

PGs for women

Women-only PGs are common in Delhi and are often chosen for security. Their agreements tend to contain specific terms that should be thought through rather than copied.

Security measures that are genuinely provided — a female warden or manager, CCTV at entrances, verified staff, a visitor register, secure main doors — can be described in the agreement. Promises made in advertisements that are not kept may give residents a claim.

Entry times are often stricter. Working women with late shifts or travel should raise this before joining, and the agreement should include a procedure for approved late arrival rather than an absolute lock-out.

Visitors, especially male visitors, are often restricted to common areas during set hours. The rule should be clear and applied equally.

Staff access to rooms should be by female staff wherever possible, and never unannounced except in emergencies.

Complaints. Residents should have a named person to whom they can report harassment or safety concerns, whether by another resident, a visitor or staff, and the operator should act on reports. Serious incidents are matters for the police.

Rules for women’s PGs should protect residents, not control them. A rule that makes sense for security — signing in visitors — is different from one that polices adult residents’ private lives, and residents are entitled to know which they are signing up for.

Start your PG agreement

Before you pay a deposit: a resident’s checklist

Once the deposit is paid and the bags are unpacked, a resident has little leverage. The time to ask questions is before paying.

None of this is confrontational; a well-run PG will answer every question readily. Hesitation over putting terms in writing is itself useful information.

Notice, exit and the inventory check

Resident’s notice. Commonly one month, sometimes to be given by a set date to leave at month-end. The agreement should say how notice is given — in writing, including by message to a named number — and what happens if a resident leaves without it, usually forfeiture of a month’s charge from the deposit.

Lock-in. Some PGs require a minimum stay of three or six months. If there is a lock-in, the agreement should state it clearly, together with the consequence of leaving earlier. A lock-in that the resident was not told about at joining is unlikely to be enforceable in practice.

Operator’s notice. The operator should give the same notice to end the arrangement without cause, and may end it earlier for serious breach — non-payment, violence, illegal activity, repeated serious breach of rules — after a written warning where appropriate.

The exit check. On the last day, the operator and resident should go through the room together against the move-in inventory, note any damage, take photographs, collect keys and access cards, and agree the final account in writing. A simple form signed by both ends most deposit disputes before they start.

Final account and refund. The deposit, less agreed deductions and any unpaid charges, is refunded within the period the agreement sets, by bank transfer. Residents should give their bank details in writing at exit.

Resident’s remedies. Where an operator withholds a deposit without justification, the resident’s first step is a written demand, and if that fails, a formal legal notice; our legal notice service drafts one. Further proceedings, whether in a civil court or a consumer commission, are for the resident’s advocate.

When a resident will not pay or leave

The reverse problem is less common but harder: a resident who stops paying and refuses to leave. Operators often react by cutting power, changing locks or removing belongings. That is a mistake.

Even where the arrangement is a licence and the licence has been properly ended, taking the law into one’s own hands can expose the operator to criminal complaints — for trespass, wrongful restraint, criminal intimidation or theft — and to civil claims. Police called to a dispute will usually look for documents: the agreement, receipts, notices.

The lawful sequence is:

  1. A written reminder of unpaid charges, citing the agreement.
  2. A written notice ending the licence on the notice the agreement provides, or earlier for the breach, stating the date by which the resident must leave.
  3. A formal legal notice if the resident does not leave.
  4. If necessary, a civil suit for possession and recovery of dues, with an application for interim relief. Our leave and licence guide explains why a licensee’s position is weaker than a tenant’s in such proceedings.

Throughout, the operator should keep providing the basic services the agreement promises until the resident leaves or a court orders otherwise, keep a record of every communication, and avoid confrontations.

A suit for possession is filed and argued by your advocate, engaged and paid by you directly; we do not quote, collect or share that fee. Our find an advocate page helps you pick one who regularly handles such cases.

A clear agreement, collected deposit, police verification and prompt written reminders prevent most such cases from reaching this stage.

Running a PG: local rules and the building

A PG agreement governs the relationship with residents. It does not answer whether the building may be run as a PG at all. Operators should check several things before opening, and periodically after.

Building use. Whether residential use as paying guest accommodation is permitted for the building under the master plan and building bye-laws applicable to the area, and whether the number of residents and any extra rooms comply with the sanctioned plan. Commercial-scale operations in residential colonies may attract objections or enforcement.

Registration and licences. Depending on the scale and the local body, trade or health licences, registration of the PG, and food-related registration where meals are provided may be required. Requirements have varied over time and between municipal zones, and enforcement around coaching hubs has increased. Check the current requirements with the local authority for your address.

Fire safety. Buildings above certain heights or areas used for accommodation may need fire safety clearance, and every PG needs basic precautions, as described above.

Society or RWA rules. In apartment buildings and gated colonies, the society’s bye-laws may restrict PG use or require notification, and neighbours’ complaints are common. Maintaining good relations and following society rules avoids problems.

The owner’s consent. Where the operator is not the owner, the lease must permit PG use and sub-licensing; operators should not rely on verbal permission.

Insurance. Property and public liability insurance protect the operator against fire damage and claims by residents or visitors.

Utilities. Electricity and water connections of the right category for the use, and adequate sanctioned electrical load for the number of residents and appliances.

Co-living brands and booking platforms

A growing share of PG accommodation in Delhi and the NCR is offered by co-living brands or listed on booking platforms. The arrangement is still a licence of a room or bed, but the documents look different.

Standard terms. Co-living operators usually use their own standard licence agreement and online terms, accepted by clicking. Residents should read them as carefully as a paper agreement, particularly the lock-in, the notice period, the deposit refund policy and the list of charges that appear only after joining — maintenance fees, electricity, onboarding fees.

Who the contract is with. It may be with the brand, with a franchisee, or with the building owner through the platform. The resident should know which, because that is who owes the deposit and who can be pursued if something goes wrong.

Platforms. Where a PG is found through a listing platform, the platform is usually only an intermediary; the agreement is between the resident and the PG. Tokens or booking amounts paid through a platform should be covered by its refund terms.

For owners who hand a building to a co-living operator, the owner’s agreement with the operator needs the same care as any lease: permitted use, sub-licensing, maintenance, safety compliance, the operator’s responsibility for residents’ deposits, and what happens to residents if the operator leaves.

Consumer protection. Residents of commercial PG and co-living operations are generally consumers of a service, and deficient service — deposits withheld without cause, promised facilities not provided — can be the subject of a complaint.

Tax and GST on PG income

Operators often overlook tax until a notice arrives. What follows reflects how PG income has usually been treated; since a new Income-tax Act took effect in April 2026 with fresh section numbers, have a chartered accountant confirm it for your case.

Income tax. Income from simply letting rooms is generally taxed as income from house property, with a standard deduction on the annual value. Where the owner provides meals, housekeeping, laundry and other services as an organised activity — as most PGs do — the income has often been treated as business income, taxable after actual expenses such as food, staff, electricity and depreciation. The treatment depends on the facts, and it affects which deductions are available and whether books must be kept.

GST. Renting residential property for use as a residence has been exempt from GST. Whether a PG or hostel falls within that exemption was disputed, and advance rulings went both ways. In 2024 the GST Council recommended a specific exemption for accommodation services up to a monthly value per person, where the stay is for a minimum continuous period, which covers many long-stay PGs and hostels. Operators charging above the threshold, offering short stays, or providing services such as meals separately, may still have GST obligations, and those with turnover above the registration threshold need to consider registration.

Receipts and records. Issuing receipts, keeping a register of residents and charges, and banking the income make both income tax and GST easier to handle, and protect the operator if a resident disputes payments.

We do not give tax advice; please take these points to your accountant.

An example: a student PG in Mukherjee Nagar

An owner in Mukherjee Nagar converts the upper three floors of his building into a PG for eighteen students preparing for civil services examinations. Most are adults; two are seventeen.

He adopts a standard agreement for every resident with a house-rules schedule: meals twice a day plus tea, electricity included except for air conditioners, which are sub-metered at the rate on his own bill; a deposit of one month; a one-month notice period; quiet hours after ten at night; visitors in the common room only; and a gate-closing time with an access card for late library sessions. For the two minors, the parents sign as guardians, and the agreement records their consent for emergency medical treatment.

Before opening, he has an engineer check the wiring on the terrace rooms, installs extinguishers and smoke detectors, clears the stairs, and confirms the building’s position with the local authority after the area’s post-fire inspections. Every resident’s police verification is completed online at joining.

At each exit, the room is checked against the move-in inventory with photographs; deposits are refunded within seven days. Deductions are rare and itemised. Over two years, the PG fills by word of mouth among students — the refund policy is what they tell each other about.

An example: a resident who stopped paying

An operator in Laxmi Nagar has a resident, a young professional, who pays for three months and then stops, citing a job loss, while continuing to occupy his bed. After two months without payment, the deposit is exhausted.

The operator’s first instinct is to change the lock. Instead, he sends a written reminder citing the agreement, then a notice ending the licence at the end of the month for non-payment, as the agreement allows. He continues meals and services. When the resident does not leave, a legal notice follows, pointing out that the arrangement is a licence, that it has ended, and that the operator will take legal action for possession and dues.

The resident’s family, contacted as the emergency contact recorded in the agreement, pays the arrears in instalments, and the resident leaves at the end of the notice period. The written agreement, the police verification, and the operator’s restraint made the difference: a lock-out would have given the resident a police complaint to make, and an unsigned arrangement would have left the operator arguing about what had been agreed.

Where PG arrangements go wrong

Our fee and what you get

A paying guest agreement from us costs ₹999 and is ready in Same day – 2 days. For operators with many residents, we prepare a standard agreement you can use for each of them.

Swipe to see the full table
IncludedWhat it prevents
A PG agreement drafted for your premises and servicesArguments about what the charge includes
A house-rules schedule, including entry time and visitorsRules that appear after the deposit is paid
Deposit, deduction, notice and refund clausesThe exit-day dispute
A move-in and exit inventory formDeductions nobody can prove
Guardian clauses for students and minorsUnclear responsibility for young residents
A stamping and signing checklist, with verification pointersAn agreement that cannot be relied on

E-stamp and notary charges are extra, billed at what they cost — we tell you the total before we start. Licensing and fire compliance for the building are for the relevant authorities and your engineer; tax questions for your accountant. Litigation, if it ever comes to that, is for your advocate, whose fee is engaged and paid by you directly; we do not quote, collect or share it.

FAQ

Paying guest agreement — questions people ask

What is a paying guest agreement?
A written agreement between the person running a PG — the owner or an operator — and a resident, allowing the resident to occupy a bed or room, usually with meals and services, for a monthly charge. It records the room and bed, the charge and what it includes, the security deposit, house rules, the notice period, and what happens when the resident leaves. Legally it is normally a licence, not a tenancy.
Is a PG agreement a rent agreement?
Usually not. A rent agreement lets a tenant have exclusive possession of premises. A PG resident normally gets the right to use a bed or room in premises the operator continues to control and service, which is a licence. The difference matters when the resident will not leave. Our leave and licence guide explains the distinction.
Is police verification required for PG residents in Delhi?
Yes, Delhi Police require verification of tenants and paying guests, and it can be done online through the Delhi Police citizen services or at the local police station. The operator should complete it for every resident before or at move-in. Our rent agreement guide explains the process, and our police verification service handles it.
Does a PG agreement need to be stamped or registered?
It should be stamped under the Delhi stamp law as an agreement or licence, which in practice means an e-stamp certificate. Registration is not ordinarily required for a licence of less than a year. Stamping matters because an unstamped agreement is difficult to rely on if there is a dispute. Our e-stamp paper guide explains how to buy one.
How much security deposit can a PG take?
There is no fixed legal limit for PG accommodation in Delhi; one to two months’ charge is common. What matters is that the agreement says exactly what the deposit covers, what may be deducted and on what evidence, and the date by which the balance is returned after the resident leaves.
Can a PG owner deduct money from the deposit?
Only for what the agreement allows and the facts support: unpaid charges, damage beyond normal wear and tear, lost keys or cards, and short notice where the agreement provides for it. Deductions should be itemised in writing, with photographs where damage is claimed. Blanket “maintenance” or “painting” deductions not in the agreement are a common cause of complaints.
What notice should a PG resident give before leaving?
Whatever the agreement says, commonly one month. Some PGs require notice to be given by a particular date to leave at the end of the month. Residents who leave without the required notice may lose part of the deposit if the agreement provides for it. The operator’s notice to a resident should also be stated.
Can a PG owner enter a resident’s room?
A PG operator usually keeps a right of access for cleaning, maintenance, safety checks and emergencies, because that is part of the service. The agreement should state when and how — with notice except in emergencies, and in the resident’s presence where possible — so that access does not become intrusion.
Can a PG have an entry time or curfew?
An operator can set reasonable house rules, including a gate-closing time, as a condition of the licence, and the resident agrees to them by signing. The rule should be written down, applied evenly, and have a procedure for late arrivals, particularly for working residents with shifts. For adult residents, rules should be proportionate.
Can a PG owner throw a resident out immediately?
Not by force. Even where the resident is a licensee and the licence has been ended properly, removing belongings, locking out or cutting services without due process can expose the operator to criminal complaints and civil claims. Follow the notice in the agreement, and if the resident still refuses, take legal steps; our leave and licence guide explains the route.
Does a PG need a licence in Delhi?
Requirements depend on the premises, the number of residents, the building and the local body. Trade or health licences from the municipal body, fire safety requirements for larger or taller buildings, and building-use rules can all apply, and enforcement tightened in Delhi after a coaching-centre fire in 2023. Check the current requirements for your building with the local authority before you open.
Is GST payable on PG rent?
For long-stay accommodation, the GST Council recommended in 2024 an exemption for accommodation services up to a monthly value per person, for stays of a minimum continuous period, which covers many PGs and hostels. PGs charging more, or offering short stays, may be taxable. Confirm the current notification and your position with a chartered accountant.
How is a PG owner’s income taxed?
It depends on what is provided. Pure letting of rooms is usually taxed as income from house property. Where the owner provides meals, housekeeping and other services as an organised activity, the income is often treated as business income. The distinction affects deductions. A new Income-tax Act has applied since April 2026, so check the current rules with a chartered accountant.
Can a PG resident use the PG address as address proof?
Often yes. A stamped PG agreement, a letter from the operator and, where needed, an affidavit are commonly accepted for many purposes, though some authorities want a registered agreement or a utility bill. Our address proof affidavit service and rent agreement guide explain the options.
Can a student under 18 stay in a PG?
A minor cannot enter a binding contract on his or her own, so the agreement should be signed by a parent or guardian, who takes responsibility for the charges and conduct. Operators accommodating minors should record guardian contacts, consent for outings and emergencies, and consider stricter safety rules.
Who is responsible if a resident’s belongings are stolen?
The agreement usually says residents keep their valuables at their own risk, and operators provide lockers or lockable cupboards. An operator may still be liable if the loss results from its own negligence or its staff’s conduct. Clear rules on locks, keys, visitors and CCTV in common areas help both sides.
What does your PG agreement service cost?
A paying guest agreement from us costs ₹999 and is ready in Same day – 2 days. It includes a draft agreement for your PG with a house-rules schedule, deposit and deduction terms, notice and exit clauses, an inventory form, and a stamping and signing checklist; we can also prepare a standard version for all your residents. Any court case is for your advocate, whose fee is engaged and paid by you directly.
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Renting and living in Delhi

Rent agreement Hostel accommodation agreement Police verification Address proof affidavit Landlord NOC E-stamp paper Notary attestation Legal notice Leave and licence guide Rent agreement guide Find an advocate All document guides

Write the rules down before the deposit is paid.

Nearly every PG dispute is about something that was never written: what the charge included, a rule that appeared later, a deduction nobody agreed to, a resident who would not leave. A short agreement, a house-rules sheet and an inventory with photographs settle most of them in advance. Tell us about your PG — or the one you are about to join — and we will prepare an agreement that is fair to both sides.

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