PG Rules In India Explained: Tenant Rights, Licences And What Makes A PG Illegal

Dozens of paying guests in Gurugram have been asked to vacate their accommodation after the Department of Town and Country Planning (DTCP) launched a crackdown on properties allegedly operating illegally from residential plots. Authorities have sealed several guest houses and PGs, saying many buildings approved as residential homes had been converted into high-density commercial accommodations in violation of zoning regulations, sanctioned building plans and development control norms.

The action has also highlighted a larger question: what exactly makes a PG illegal, and what rights do the people living in one have? Since India has no single law governing paying guest accommodation, the answer depends on a combination of contract law, municipal regulations, planning laws and state-specific rules.

What Is The Legal Difference Between A PG And A Hostel?

There is no central legislation that specifically defines a paying guest (PG) accommodation. Broadly, a PG is a private residence where the owner allows people to stay in exchange for a fee, often while also providing services such as meals and housekeeping. A hostel, on the other hand, is generally run by an educational institution or a commercial operator and is meant to accommodate a larger number of residents.

Legally, the more important distinction is whether the arrangement amounts to a licence or a lease. Most PGs operate through leave-and-licence agreements under the Indian Easements Act, 1882, where the owner merely grants permission to occupy the premises without transferring any legal interest in the property. A tenancy, governed by the Transfer of Property Act, 1882 and, in some cases, state rent laws, gives the occupant stronger legal rights.

The Supreme Court has repeatedly held that the title of an agreement is not decisive. Courts look at the actual nature of possession and the intention of the parties before determining whether someone is a tenant or only a licensee.

What Permissions Do PG Owners Need?

Unlike hotels, PGs are not governed by one uniform licensing framework across India. The approvals required depend on the state government, municipal corporation and local planning authority.

A property operating as a PG may require municipal permissions, compliance with land-use regulations, fire safety approvals and building occupancy clearances. If food is provided commercially, food safety regulations may also apply. Several cities also require police verification of occupants.

The recent DTCP action in Gurugram illustrates how these rules operate in practice. Officials found that several residential buildings had been converted into guest houses and PGs without the necessary approvals, violating zoning regulations, sanctioned building plans and development control norms. In one case, a building approved for four families was allegedly converted into a 45-room accommodation facility, prompting authorities to seal the premises and disconnect its electricity supply.

What Rights Do Tenants Have During Evictions?

The rights of people living in a PG depend largely on the agreement they have signed. If the arrangement is genuinely a leave-and-licence agreement, the owner can generally terminate it according to the notice period mentioned in the contract. However, occupants cannot be forcibly removed or illegally locked out without following due process.

Disputes over security deposits, breach of contract or wrongful eviction can be taken before the appropriate civil court. Where an agreement resembles a tenancy despite being labelled as a licence, courts may examine the substance of the arrangement instead of relying only on its title.

The Gurugram sealing drive has also exposed another practical issue. Several tenants said they were unaware that authorities had already issued notices to the property owners and were forced to find alternative accommodation after the premises were sealed. Following the operation, the DTCP advised all occupants to independently verify whether the property they were living in had the necessary approvals rather than relying solely on assurances from landlords or PG operators.

Can Residential Buildings Be Used Commercially?

Whether a residential building can legally function as a PG depends on the applicable planning and municipal rules.

Many cities permit limited paying guest accommodation in residential areas, but only subject to specific conditions. Problems arise when residential buildings are substantially modified or used as commercial lodging facilities without approval, exceeding the limits permitted under local zoning regulations or sanctioned building plans.

The Gurugram crackdown was based on precisely these violations. According to the DTCP, several residential plots had been converted into commercial establishments, including PGs, guest houses, clinics, gyms and beauty parlours, resulting in excessive pressure on water, sewage and electricity infrastructure while also creating safety concerns.

What Safety Norms Must PGs Follow?

Although India does not have a single national safety code exclusively for PG accommodation, operators are expected to comply with applicable fire safety laws, municipal building regulations and the National Building Code.

These requirements are intended to ensure that buildings remain structurally safe, do not exceed approved occupancy limits and have adequate fire safety measures and emergency exits. Depending on the state, additional standards relating to sanitation, ventilation and security may also apply.

In the most recent case, authorities in Gurugram said some of the buildings targeted during the enforcement drive had undergone extensive unauthorised structural modifications that significantly increased occupancy beyond approved limits, raising concerns about both fire safety and civic infrastructure.

How Do Different States Regulate PG Housing?

India does not have a uniform law regulating PG accommodation. Instead, states and urban local bodies follow different approaches.

Karnataka is among the few states to have framed dedicated rules for paying guest accommodation, requiring operators to register and comply with prescribed standards relating to safety and infrastructure. In many other states, including Maharashtra, Delhi and Haryana, PGs are primarily governed through municipal building bye-laws, planning regulations, fire safety requirements and local licensing norms rather than a dedicated statute.

As a result, a PG that is legally compliant in one city may require entirely different permissions in another. For tenants, this also means that checking whether a property has the required municipal approvals and complies with local planning rules can be just as important as reading the rental agreement.

The Gurugram crackdown underscores that enforcement action is often directed at property owners rather than occupants. But when an unauthorised PG is sealed, it is the residents who frequently bear the immediate consequences. As cities continue to tighten oversight of paying guest accommodation, both landlords and tenants are likely to face greater scrutiny over whether these properties are operating within the law.