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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