HB 1435

                                                             Introduced Version
           HOUSE BILL No. 1435
                 _____
              DIGEST OF INTRODUCED BILL
Citations Affected: IC 32-31.
Synopsis: Landlord-tenant matters. Requires a landlord to provide and
maintain a rental premises that is free from the following: (1) Pests,
including rodents and invasive insects. (2) Mold. (3) Rot. Sets forth a
procedure for a tenant to use to initiate a request for repairs. Requires,
under certain circumstances, a landlord to repair or replace an essential
system not later than 72 hours after being notified by a tenant that the
tenant's rental unit is without essential services. Defines "essential
services" and "essential system". Allows for certain remedies to the
tenant for the landlord's noncompliance, including a procedure for the
deposit of rent that is due with the clerk of the court if the landlord fails
or refuses to make repairs or take remedial action. Provides that, after
June 30, 2026, a landlord may not manage a rental property in Indiana
unless the landlord: (1) is authorized to do business in Indiana; (2)
maintains an office at one or more physical locations in Indiana; or (3)
appoints an Indiana licensed real estate broker or broker company to
manage the rental property.
Effective: July 1, 2026.
                                 Moed
   January 8, 2026, read first time and referred to Committee on Judiciary.
2026  IN 1435—LS 6697/DI 137
                                                                                       Introduced
            Second Regular Session of the 124th General Assembly (2026)
 PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
 Constitution) is being amended, the text of the existing provision will appear in this style type,
 additions will appear in this style type, and deletions will appear in this style type.
   Additions: Whenever a new statutory provision is being enacted (or a new constitutional
 provision adopted), the text of the new provision will appear in this style type. Also, the
 word NEW will appear in that style type in the introductory clause of each SECTION that adds
 a new provision to the Indiana Code or the Indiana Constitution.
  Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
 between statutes enacted by the 2025 Regular Session of the General Assembly.
                   HOUSE BILL No. 1435
    A BILL FOR AN ACT to amend the Indiana Code concerning
 property.
     Be it enacted by the General Assembly of the State of Indiana:
1    SECTION 1. IC 32-31-8-5 IS AMENDED TO READ AS
2 FOLLOWS [EFFECTIVE JULY 1, 2026]: Sec. 5. (a) As used in this
3 section, "essential services" means:
4      (1) electrical systems;
5      (2) plumbing systems;
6      (3) sanitary systems;
7      (4) heating, ventilating, and air conditioning systems;
8      (5) elevators;
9      (6) appliances; and
10      (7) doors and windows that lock securely;
11 needed for the safe and habitable occupation of a rental unit by a
12 tenant.
13    (b) As used in this section, "essential system" means a system,
14 or one (1) or more component parts of a system:
15      (1) used for; or
16      (2) necessary to;
17 the delivery of one (1) or more essential services to a rental unit.
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1    (c) A landlord shall do the following:
2(1) Deliver the rental premises to a tenant in compliance with the
3rental agreement, and in a safe, clean, and habitable condition.
4(2) Comply with all health and housing codes applicable to the
5rental premises.
6(3) Make all reasonable efforts to keep common areas of a rental
7premises in a clean and proper condition.
8(4) Provide and maintain the following items in a rental premises
9in good and safe working condition, if provided on the premises
10at the time the rental agreement is entered into:
11(A) Electrical systems.
12(B) Plumbing systems sufficient to accommodate a reasonable
13supply of hot and cold running water at all times.
14(C) Sanitary systems.
15(D) Heating, ventilating, and air conditioning systems. A
16heating system must be sufficient to adequately supply heat at
17all times.
18(E) Elevators, if provided.
19(F) Appliances supplied as an inducement to the rental
20agreement.
21(4) Provide and maintain all essential systems.
22(5) Provide and maintain a rental premises that is free from
23the following:
24(A) Pests, including rodents and invasive insects.
25(B) Mold.
26(C) Rot.
27    (d) Subsection (c)(4) does not:
28(1) prohibit a landlord from interrupting, shutting off, or
29terminating one (1) or more essential services to a rental unit
30as needed:
31(A) in an emergency;
32(B) to make good faith repairs; or
33(C) for construction; or
34(2) require a landlord to pay for one (1) or more essential
35services provided to a rental unit if the landlord has not
36agreed to do so under the rental agreement.
37    (e) To initiate a request for a repair of an essential system, an
38 essential service, or a repair under subsection (c), a tenant shall use
39 the procedure set forth in this subsection. A tenant shall first make
40 a written or electronic repair request to a landlord. Upon receipt
41 of a tenant's repair request under this subsection, a landlord shall
42 provide a written or electronic acknowledgment of the request
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1 within twenty-four (24) hours of the receipt of the request. A
2 tenant's written or electronic request for a repair and a landlord's
3 written or electronic acknowledgment of a repair request may
4 include a text message, electronic mail, certified mail, or another
5 written communication that allows for verification of delivery.
6    (f) Subject to subsection (g), a landlord shall repair or replace
7 an essential system not later than seventy-two (72) hours after
8 being notified by a tenant in accordance with subsection (e) that
9 the tenant's rental unit is without one (1) or more essential services
10 as a result of:
11(1) a malfunction in the essential system; or
12(2) the landlord's failure to otherwise maintain the essential
13system in good and safe working condition.
14    (g) The seventy-two (72) hour period set forth in subsection (f)
15 does not apply if:
16(1) the tenant's rental unit is without one (1) or more essential
17services because of a malfunction in an essential system, and
18the malfunction is the direct result of the tenant's commission
19of waste to the essential system or the rental unit; or
20(2) the landlord makes a good faith attempt within the
21seventy-two (72) hour period set forth in subsection (f) to
22undertake the needed repairs to, or the replacement of, an
23essential system through:
24(A) the landlord's own efforts; or
25(B) the services of:
26(i) a contractor; or
27(ii) an employee or agent of the landlord;
28and the landlord or person described in clause (B) is unable to
29begin or complete the needed repairs or replacement within
30the seventy-two (72) hour period set forth in subsection (f).
31    (h) To demonstrate a good faith attempt to address a tenant's
32 repair request under subsection (e) or for purposes of subsection
33 (g)(2), a landlord shall provide proof of intention to repair within
34 seventy-two (72) hours of the tenant's repair request. Proof of
35 intention to repair may include a quote, confirmation of scheduled
36 maintenance from a vendor, or confirmation of scheduled
37 maintenance from the landlord if the landlord performs the repair.
38    SECTION 2. IC 32-31-8-5.5 IS ADDED TO THE INDIANA CODE
39 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
40 1, 2026]: Sec. 5.5. (a) To use the procedure established by this
41 section, a tenant must:
42(1) be current on rent payments and have a history of on time
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1payments on the same rental premises for the last six (6)
2months; or
3(2) have a history of on time payments since the beginning of
4the lease if the tenant has rented for less than six (6) months.
5    (b) In addition to, or instead of, bringing an action under section
6 6 of this chapter, a tenant may enforce an obligation of a landlord
7 under this chapter by doing the following:
8(1) Notify the landlord, in writing or electronically, after a
9seventy-two (72) hour waiting period that:
10(A) the landlord has failed to make necessary repairs
11under this chapter; and
12(B) if the landlord fails to make the necessary repairs
13before the tenant's next regular rental payment is due
14under the rental agreement, the tenant may petition the
15court to deposit rental payments with the clerk of the
16court.
17The court shall notify the landlord not later than thirty (30)
18days after the date the tenant's petition is approved or before
19the date that the next rental payment is due, whichever is
20earlier. During this time period, the landlord may not file an
21action to evict the tenant.
22(2) Subject to subsection (c), deposit all rent that is due with
23the clerk of the court having jurisdiction in the county where
24the rental premises is located if the landlord fails or refuses
25to:
26(A) make the repairs; or
27(B) take the actions necessary to remedy the condition
28described in the tenant's notice under subdivision (1);
29before the due date of the tenant's next regular rental
30payment following delivery of the notice under subdivision
31(1).
32(3) Apply to the court for an order that directs the landlord to
33remedy the condition.
34(4) Terminate the rental agreement.
35    (c) A tenant may not take any action described in subsection
36 (b)(2), (b)(3), or (b)(4) if the:
37(1) tenant does not satisfy the condition required by
38subsection (a);
39(2) tenant prevents the landlord from having reasonable
40access to the rental premises to make any repairs or take any
41action necessary to remedy the condition described in the
42tenant's notice before the due date of the tenant's next regular
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1rental payment following delivery of the notice under
2subsection (b)(1); or
3(3) landlord:
4(A) owns, manages, or operates not more than four (4)
5rental units at any one (1) time; or
6(B) occupies one (1) of the living quarters of the rental
7premises in a dwelling containing living quarters that are
8intended to be occupied by not more than four (4) families
9living independently of each other.
10     (d) A proceeding under this section does not preclude the tenant
11 or the landlord from enforcing any obligations listed in the rental
12 agreement.
13     SECTION 3. IC 32-31-8-6.5 IS ADDED TO THE INDIANA CODE
14 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
15 1, 2026]: Sec. 6.5. (a) This section applies to an action that is filed
16 under section 6 of this chapter after June 30, 2026.
17     (b) During the pendency of an action to which this section
18 applies, if the tenant continues to occupy the rental unit upon
19 which the action is based, the court may issue a provisional order
20 that requires the tenant to make regular rental payments otherwise
21 due to the landlord under the rental agreement to:
22(1) the clerk of the court, who shall hold the payments in trust
23for the parties; or
24(2) an attorney trust account;
25 as directed by the court. The funds held by the clerk or in an
26 attorney trust account under this subsection may not be disbursed
27 unless the court issues an order for their disbursement.
28     (c) Subject to subsection (e), if the tenant is the prevailing party
29 in the action under section 6 of this chapter, the tenant is entitled
30 to a refund of payments made under an order issued by the court
31 under subsection (b). The amount of the refund:
32(1) shall be determined by the court after taking into
33consideration:
34(A) the estimated cost of any repairs or other action
35necessary to remedy the condition that was the basis of the
36tenant's action under section 6 of this chapter;
37(B) efforts undertaken by the landlord before or after the
38filing of the tenant's action under section 6 of this chapter
39to remedy the condition that was the basis of the tenant's
40action under section 6 of this chapter; and
41(C) any other factors that justice may require; and
42(2) shall be disbursed to the tenant upon order of the court.
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1    (d) Subject to subsection (e), if the tenant is not the prevailing
2 party in the action under section 6 of this chapter, the tenant is not
3 entitled to a refund of any rental payments made under an order
4 issued by the court under subsection (b), and any amounts held in
5 trust by the clerk of the court or in an attorney trust account shall,
6 upon order of the court, be disbursed to the landlord and credited
7 against the amount of the regular rental payments due to the
8 landlord under the rental agreement during the pendency of the
9 action.
10    (e) The court may reduce the amount to be disbursed to a
11 landlord in an order under subsection (d), if the court determines
12 that the landlord's failure to comply with one (1) or more of the
13 requirements of this chapter contributed in any way to the
14 necessity of repairs or other action needed to remedy the condition
15 that was the basis of the tenant's action under section 6 of this
16 chapter as justice may require.
17    SECTION 4. IC 32-31-8-8 IS ADDED TO THE INDIANA CODE
18 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
19 1, 2026]: Sec. 8. (a) If rent is being deposited with the clerk of the
20 court under section 5.5 or 6.5 of this chapter, the landlord may
21 apply for the release of rent deposits to the:
22      (1) clerk of the court on the basis that the condition contained
23      in the notice is remedied; or
24      (2) court on the basis that the:
25(A) tenant:
26(i) did not comply with the notice requirement in section
275.5 of this chapter; or
28(ii) was not current on rent payments under the rental
29agreement at the time the tenant initiated the rent
30deposits with the clerk of the court, as required by
31section 5.5(a) of this chapter; or
32(B) landlord did not violate an obligation under this
33chapter.
34    (b) The landlord shall name the tenant as a party to an
35 application filed under this section.
36    (c) The court shall hold a hearing not more than sixty (60) days
37 after the application is filed unless, for good cause shown, the court
38 continues the hearing.
39    (d) If the court continues a hearing under this section, the court
40 may, upon the landlord's request, order a release of partial rent
41 deposits for the following operating costs arising from the rental
42 premises that is the subject of a proceeding under this chapter:
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1      (1) Mortgage payments, including periodic interest payments
2      on the mortgage.
3      (2) Insurance premiums.
4      (3) Real estate taxes.
5      (4) Utility services.
6      (5) Repairs.
7    (e) If the court finds in the landlord's favor after a hearing
8 under this section, the court shall order the full release of rent
9 deposits, minus costs, to the landlord.
10    (f) If the court finds after a hearing under this section that the:
11      (1) tenant's act or omission caused the condition; or
12      (2) tenant intentionally acted in bad faith;
13 the tenant is liable for damages caused to the landlord and costs,
14 including reasonable attorney's fees.
15    SECTION 5. IC 32-31-13 IS ADDED TO THE INDIANA CODE
16 AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE
17 JULY 1, 2026]:
18    Chapter 13. Landlord's Required Nexus
19    Sec. 1. As used in this chapter, "landlord" has the meaning set
20 forth in IC 32-31-3-3.
21    Sec. 2. After June 30, 2026, a landlord may not manage a rental
22 property in Indiana unless one (1) or more of the following apply:
23      (1) The landlord is authorized to do business in Indiana.
24      (2) The landlord maintains an office at one (1) or more
25      physical locations in Indiana.
26      (3) The landlord appoints an Indiana licensed real estate
27      broker or broker company to manage the rental property.
 2026  IN 1435—LS 6697/DI 137