Tenants seek cap on security deposit for rented homes

At present, landlords demand 10 months’ rent, which can set the lessees back by a few lakhs.

March 20, 2016 12:00 am | Updated 08:01 am IST - Bengaluru:

Photo: K. Murali Kumar

Photo: K. Murali Kumar

With engineers, techies and entrepreneurs drawn to Bengaluru’s vibrant start-up ecosystem and IT industry, rental prices are on the rise. But rental deposits are now setting lessees back by lakhs of rupees with the unwritten rule of 10 months’ rent as security.

This rule has prompted many petitions to the government seeking a cap in the security deposit that landlords can command. Some online petitions have garnered as many as 25,000 signatures. The petitioners want the security deposit to be capped at three months’ rent, a rule proposed by the Centre in the draft Model Tenancy Act 2015.

Waseem Memon, a marketing manager in a private company, said, “We are planning to approach the High Court seeking a direction to the government to incorporate the three-month cap.”

The 10-month-rent as security deposit is the norm across the city. While landlords argue that this helps weed out unwanted tenants, coughing up so much money means that young tenants are forced to live in paying guest accommodation or taking loans.

“I came to Bengaluru two years ago after being hired by a BPO on Inner Ring Road. While leaving my hometown, my parents had said that they would visit me at least once a year. However, I can only afford a paying guest room, which does not allow outsiders. I was ready to pay up to Rs. 15,000 as rent but everyone also asks for Rs. 1.5 lakh security deposit. How can a person who has just joined work raise such a huge amount?” says Mohan (name changed), who is from Surat, Gujarat.

Landlords backtrack

Others argue that the practice must be accompanied with some guarantee that the amount will be returned promptly on vacating. “We had given Rs. 2.5 lakh as security deposit and lived peacefully for three years. Now when we have to vacate, the owner says he does not have the money to repay us. He has asked us to wait for a few months. We got along well with the owner and do not want to approach the police, but how can we pay the deposit for the next house?” says Vinay Tewari, who stays near Old Airport Road.

How other cities fare

In 2015, a Chennai Small Causes Court cited a 1996 ruling of the Supreme Court and ruled that only a month’s rent can be taken as security deposit

But landlords continue to demand 12 months’ rent

In Hyderabad, the deposit is 3-4 months’ rent

In Mumbai and New Delhi, deposit is 3-6 months’ rent

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