Hi,

I've noticed a common trend of collecting ten months rent as security deposit at the time of renting a property in Bangalore.

1. Is this legal? or, Is it (number of months) just a matter of understanding between the property owner and the tenant?
2. What does the law say in this regard?
3. What are the (rental) laws (state and central) in force in the state of Karnataka?

Appreciate your responses.

regards
yenuga
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  • Dear friend,

    This is what is being insisted at Chennai also, ( 10 months rent as advance ) and widely prevalent.

    ks2071746
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  • Originally Posted by yenuga3
    Hi,

    I've noticed a common trend of collecting ten months rent as security deposit at the time of renting a property in Bangalore.

    1. Is this legal? or, Is it (number of months) just a matter of understanding between the property owner and the tenant?
    2. What does the law say in this regard?
    3. What are the (rental) laws (state and central) in force in the state of Karnataka?

    Appreciate your responses.

    regards
    yenuga



    It is the matter of mutual agreement.

    The house owner is permanently residing there (in most cases). He will not run away leaving his property.

    But on the part of tenants, there is a chance of running away without giving rent for many months. So the house owner has to be more cautious. Thats why he is charging 10 months payment in advance.

    Even though this custom is prevalent, some house owners are charging 3 or 6 months rent as advance.

    Thanks

    chataara
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  • Thanks for your responses.

    Chataara,
    what you had pointed out was one of the many possibilities. The same possibility can be seen from Tenant's perspective as Owner is trying to make extra money in terms of interest over 10 month deposits on top of the rent on the pre test of "run away" tenants.

    Owners make it a point to capture in the agreement that deposit will be returned with no interest. Many such possibilities can be cited to mint money.

    It is not just the owners have such concerns about tenants. Though my intention is not to comprehend the possibilities, but, just think of owners who insist on dealing in cash only to avoid tax on rental income. It could turn out to be a nightmare for tenants to recover deposits from such owners.

    I personally think that is exactly where a legal regulation should come into play. Not sure if there is one already at least for the sake of record, but may not be in practice.

    Any legal reference is appreciated.

    regards
    Yenuga
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  • Originally Posted by yenuga3
    Thanks for your responses.

    Chataara,
    what you had pointed out was one of the many possibilities. The same possibility can be seen from Tenant's perspective as Owner is trying to make extra money in terms of interest over 10 month deposits on top of the rent on the pre test of "run away" tenants.

    Owners make it a point to capture in the agreement that deposit will be returned with no interest. Many such possibilities can be cited to mint money.

    It is not just the owners have such concerns about tenants. Though my intention is not to comprehend the possibilities, but, just think of owners who insist on dealing in cash only to avoid tax on rental income. It could turn out to be a nightmare for tenants to recover deposits from such owners.

    I personally think that is exactly where a legal regulation should come into play. Not sure if there is one already at least for the sake of record, but may not be in practice.

    Any legal reference is appreciated.

    regards
    Yenuga


    10 month security deposit is draconian... Imagine for a rent of 10,000 pm , an immediate cash outflow of 1 lakh rupees !!!!
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  • I just rented an apartment in Bandra West In Mumbai and paid a 6 months security deposit of Rs. 3 Lacs. From a Landlord's prespective, I think it is fine. Ofcourse this pinches the tenant. I also noticed that renting in Gurgaon is far easier than renting in Mumbai. One can rent a flat in 2-3 days in Gurgaon; whereas in Mumbai there a lot of issues and renting is extremely diffcult.
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  • Originally Posted by harry_real
    I just rented an apartment in Bandra West In Mumbai and paid a 6 months security deposit of Rs. 3 Lacs. From a Landlord's prespective, I think it is fine. Ofcourse this pinches the tenant. I also noticed that renting in Gurgaon is far easier than renting in Mumbai. One can rent a flat in 2-3 days in Gurgaon; whereas in Mumbai there a lot of issues and renting is extremely diffcult.


    It's 2 month in Noida, IP etc as least as per last year info from a broker. So we asked for 2 months deposit but we gave 10 month in Bangalore.

    r
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  • 10month beda blog

    Dear All,

    My wife and I are encountering this 10 month deposit issue as well and we've stated a blog about it. So that we can gauge public opinion we've sent up a poll. Would appreciate it if some of you would respond to the poll and/or pen down any thoughts you may have in respect of the reasonableness or lack thereof of the whole 10month security deposit issue. Lets discuss this issue and thrash it out.

    The aim behind the blog is to make Bangalore a little more progressive in terms of its leasing custom. We can also act as a forum where people, both landlords and tenants, can post their requirements where they are not looking for this crazy 10month deposit.

    The blog address is - http://10monthsbeda.wordpress.com
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  • advance rent

    This is really really tragic...N i wont sgree to it even if I were the owner 10 months is too much ..what sense does it make?

    My brother is also in dilemma ..he is in mumbai and rented a flat ...paid advance of 75000/-
    now his landlord died 3 days back ..(sorry for his demise) ..and this man was single.
    Now my brother is need of money as he has to leave mumbai ...just imagine how difficult it is to get ur own money back in such a case!!
    even if he wasnt single....how difficult n embarassing wud it be to even talk abt it to the family members!!

    any help wud be appreciated friends!
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  • What can be done in such a situation, if your brother has any paperwork evidencing that the money was paid or if he made the payment through cheque, to take it to either the executor of your landlord's estate i.e. his lawyer or his closest living relatives who are now going to be managing his properties.

    If the payment was made in cash and there is no record of it then he pretty much has no option but to cross his fingers and hope that the landlords next of kin are decent people and will pay him back.

    Ofcourse, out of sensitivity it might be best to wait a few days before taking this up with the landlords family members.

    Its ridiculous the kind of problems this deposit issue creates.
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