Renting Out Property? Why Police Verification Alone May Not Be Enough

India's rental housing market is growing, rents are rising, and more people are expected to move to cities in the coming years. Yet, for many landlords, checking a prospective tenant still begins and ends with police verification and an 11-month rental agreement.

These checks may establish a tenant's identity and help flag certain criminal records, but they do not necessarily reveal a history of rent defaults, financial difficulties or civil disputes. For landlords, overlooking these risks can mean lost rental income, legal expenses and lengthy battles to recover possession of their property.

The Eviction Reality Nobody Talks About

Most landlords in India rely on one of two things before handing over a key: an 11-month agreement and a police verification form. The first is a contractual formality. The second is, in practice, often delayed, inconsistently enforced and limited to criminal record checks against a single identity document.

Neither tells a landlord anything about whether the tenant has a history of defaulting on rent, whether they are facing active civil litigation, whether their stated income is real or whether they have been flagged on a sanctions or watchlist. By the time any of those surfaces are reached, the tenant is already inside the property.

“An eviction suit in a traditional civil court can take anywhere from one to three years. Hearings are typically spread over 12 to 36 months. Even in states that have adopted the Model Tenancy Act 2021, which was designed to modernise the process, timelines have not been specified for all cases, and adoption across states remains uneven,” says Karan Bhatty, Founder & CEO, Millow, a background verification and due diligence company.

The human cost of this gap is real. A landlord in Delhi rented a room for Rs 25,000 per month. The tenant, who had appeared entirely credible at the time of signing, wilfully defaulted shortly after moving in. Recovering possession required months of court proceedings and legal fees exceeding a lakh of rupees. The landlord got the property back significantly worse off than before. No police verification check would have caught what a proper credit and litigation screen would have flagged at the outset.

“The Model Tenancy Act, introduced in 2021, was a step forward. Its stipulation of a 60-day timeframe for adjudication of applications and appeals by the Rent Court and Tribunal is intended to bring urgency to dispute resolution. But the Act is advisory, not mandatory, and most states are still operating under older rent control regimes that tilt heavily toward the tenant. Until full adoption is achieved, the practical reality for landlords is that a bad tenancy is an expensive and time-consuming problem to undo,” says Bhatty.

The logical response is to screen properly before it begins.

What Screening Should Actually Look Like

Not all properties carry the same risk, and not all screenings need to be identical. A room rented for Rs 25,000 a month and a commercial premises leased for Rs 6,00,000 a month are fundamentally different risk propositions and should be treated accordingly.

“A property owner leasing premises at approximately Rs 6,00,000 per month recently requested comprehensive due diligence on a prospective tenant before signing. The scope covered financial credibility and history, criminal records, civil court checks, sanctions screening and adverse media. This is the standard that high-value property decisions deserve,” says Bhatty.

It is also increasingly the standard that premium residential operators are building into their onboarding as a matter of routine, running credit checks, employment and income verification and court record checks on every applicant before a key changes hands.

The components of a thorough tenant screen are not complicated. Identity verification against multiple records, credit and financial history, court and criminal checks, employment and income verification, prior tenancy references, sanctions and watchlist screening and an adverse media review. What varies is the depth of each component relative to the value and nature of the property.

The principle is straightforward. The more a landlord stands to lose from a bad tenant, the more it is worth knowing about that tenant before they move in.

The Buyer Problem Property Developers Are Not Talking About

Tenant risk is widely understood, if poorly managed. Buyer risk is barely discussed at all.

Property developers, particularly those selling high-value residential or commercial units, face a distinct but equally serious exposure. Buyers or their representatives who misrepresent their identity, source of funds or intent create legal, reputational and financial risks that can linger for years.

“One of the more disruptive patterns is the speculative buyer who purchases with the intention of flipping the property quickly, disrupting carefully managed pricing, unsettling other buyers and damaging the developer's brand in the process,” says Bhatty.

According to him, complaints about real estate scams in India surged 25 per cent in 2025, and buyers lost an estimated Rs 15,000 crore that year alone. Delhi reported Rs 1,420 crore lost to builder fraud in 2022, and over 80 fraud cases were registered in 2024. These figures typically capture fraud against buyers. The risk runs in both directions.

Buyer due diligence, which is not yet standard practice among Indian developers, should cover identity and KYC verification, source of funds checks, politically exposed person and sanctions screening, litigation history and adverse media. For high-value transactions, this is not excessive caution. It is basic risk management that financial institutions already apply, and that the real estate sector is overdue to adopt.