Quote:
Originally Posted by Benz
Dear Forum Members,
I'd like to know about the Legal Clauses regarding 'security deposit' in a rental transaction on behallf of both the Tenant and the Landlord.
Need lawful suggestions please.
Thanks.
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Leave and License Agreement should have a strong clause to secure the Security Deposit given the Licensee ( tenant is a wrong word ) and at the same time allow Licensor/s ( Owner/s ) to set off any unpaid licensee fees, unpaid utilities bills, unpaid for repair/s, maintenance etc.
Security Deposit serve the basic purpose of being a Caution Money in the hands of the Owner/s to secure unpaid license fees if the Licensee defaults in paying it on time.
It is always advisable to have 6 -12 months license fee as deposit to cover the above mentioned eventualities and avoid litigation between owners and licensee.
At the same time, licensee has to be careful in exchanging vacant possesion of the premises only against reciept of Security Deposit ( subject to statutory deductions ). If he hands over the possesion on good faith, without actually getting the deposit, the recovery of the security deposit can be a long haul for him.
In the agreements drafted by me, for my cleints, we put the following clause for the security deposit :
The Licensee will pay a sum of Rs. __________/- (Rupees ____________________ Only) on execution of this agreement as and by way of Security Deposit for the observance and performance of the terms and conditions of this agreement. This deposit is subject to refund to the Licensee without any interest on expiry/revocation of this agreement and further subject to such deductions like unpaid Electric Bill, Telephone Bill, Cable Charges, Parking Charges, Pipeline Gas Charges, Compensation, repair etc., therefrom that the Licensor may then be entitled to receive and recover from the Licensee. The Licensor shall at the time of handing over the security deposit to the Licensee, retain a sum equivalent to three months of average electricity bills, Telephone Bills, Pipeline Gas Charges, and Cable Charges and Parking Charges, which shall be adjusted towards payment of unpaid electricity bills, telephone bills, Pipeline Gas Charges, Cable Charges, Parking Charges, if any, for the period the Licensee has been in occupation of the said flat.
Hope this helps
I can send copies of Leave License Agreement on request
Regards
Ram
Realtor