How many security deposits can landlords charge in case of house for rent

 

When renting a house, a tenant has to give a security deposit to the landlord, which is returned by the landlord once the contract expires. For a tenant, this security deposit is often a big concern, as it can be a substantial amount and has to be negotiated with a landlord.

 There is a certain fixed amount that the renters have to pay to the owners as fixed deposit for house for rent in Bangalore.

Common problems faced by tenants, with respect to security deposits

At times, landlords demand more than two months’ rent. The worst part is that they take their own time, to give the amount back. A majority of tenants, especially in metro cities, comprise of the young working population, who are unable to pay high amounts as security deposits for house for rent in Bangalore.

 

“At times, tenants have to give up on decent living conditions, as they cannot afford the high deposits demanded by landlords. Some people also resort to taking personal loans, to pay the deposit amount for house for rent.

The importance of security deposit for a landlord

From a landlord’s perspective, the security deposit is essential for securing due performance by the tenants, of his/her obligations under the tenancy agreement. The landlord, under the agreement, has right to adjust the security deposit against any arrears of rents or other charges payable under the agreement in houses for rent.

The convention of upfront payment differs across markets. The upfront payment is taken, to safeguard against rental defaults, etc. The security deposits is currently charged as per the convention in the micro-market and is required to be paid back in full to the house for rent, at the end of the tenure.

Standard wear and tear of an apartment due to usage, is usually not charged and the tenant is expected to give back the apartment in its original condition to the landlord.

The government is also in the process of finalising a ‘Model Tenancy Act’.

The Model Tenancy Act for houses for rent prescribes a cap on the amount of security deposit to be accepted from tenant for residential premises, which is a maximum of double the amount of rent. However, the Act does not provide for any such maximum cap on the deposit for commercial premises. The Act empowers the landlord to make deductions from such deposit, of the arrears of rent and other charges and requires the landlord to refund the remaining deposit, at the time of the tenant vacating the premises.

Dos and don’ts for security deposits in lease agreements for house for rent

·        The rental agreement should mention the amount of security deposit given by the tenant to the landlord and when it will be refunded.

·        Contracts should be legally registered and signed by both the parties. There should be no hidden clauses in the agreement.

·        Landlords should return the security deposit, once the contract expires. If any amount is deducted, the landlord should provide justifications for the same.

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