What is a PG (paying guest) agreement?

A paying guest (PG) agreement is a licence or rental contract between a homeowner and an individual who pays to live in a room within the owner's residence, typically sharing common facilities. It is legally distinct from a full rental agreement as the owner usually continues to live in or own the same premises.

Key Features

• Covers a single room or shared room, not the entire property.
• Meals, housekeeping, and laundry may be included.
• Month-to-month arrangement is most common.
• Lower legal protection for the PG guest compared to a formal tenant.

Typical Terms in a PG Agreement

• Monthly charges and due date.
• Notice period (typically 15 to 30 days).
• Security deposit (usually 1 to 2 months).
• Rules regarding guests, curfew, common area usage, and cooking.

PG agreements are popular in metro cities among students and working professionals but often lack legal rigour. Both PG owners and guests benefit from a written agreement that clearly documents monthly charges, notice terms, and house rules reducing scope for disputes that are otherwise difficult to resolve.