Is there a law which states how much security deposit a landlord can ask for?

Context: I have been hunting for a (rented) flat for quite a while now. I did some survey during Sept-Oct, 21, then paused for a while and I just started surveying again. First of all the rents have skyrocketed. I can see a difference of at least 2-3K. However, what surprises me more is the amount of security deposit that is being asked.

From what I know, you can ask for a deposit worth two-three months rent, but I am now seeing deposit almost 5X of the rent. For instance, I saw a flat today and the rent was Rs 22000 with a security deposit of Rs 100,000 🤯 Hence I wonder if it is something that the landlord asks out of their free will or is there an actual law regarding it.

P.S. I stay in Pune

no. It can be anywhere from 1 month to 1 year worth rent.

1 year? 🙄

There's no regulation really, I stay in semi-furnished flat in Pune (2BHK, Baner-Pashan Link Road), where my rent is fixed at 20k and deposit is 50k, but then I've been staying here for over 4 years now. It largely depends on initial negotiation + furniture that's part of the house already.

Okay, understood, but then what about this? https://housing.com/news/all-you-need-to-know-about-the-model-tenancy-act-2019/

1L deposit for 22k rent is pretty standard (here in Chennai).

i remember some high court passing judgement for chennai and bangalore asking 1 year rent saying not to take beyond 2 months

@orange-action-12733 Its the Model Tenancy Act, see the link above.

3 months to 6 months deposit ask is very common in Bangalore. There are extremes too. Where owner asks for deposits in between 6 months to 12 months.

Okay, I came across this for the first time today, hence it took me by surprise. But it looks like its sort of a norm asking for such amounts of deposit.

I wonder if you could do anything even if there was a law? Like, I feel like landlord would just be like, I don't want to rent you at all now lol. It's sad but I think they can get away cause they can easily find another one who's willing to pay.

Yeah. Its a sorry state for the tenant 🥲 Zolo Stays is for PGs not for flats, and yes, the deposit is capped at one months rent (at least in Pune). If you go via NoBroker, then I haven't seen such limitations. The example that I shared is from NoBroker.

I remember there was a talk about an "Act" which capped security at two months rent. Not sure what happened there.

I just wish to remind folks that there is a difference between having a law and it being enforced. We have a law requiring helmets for 2-wheelers. Doesn't mean that people don't drive without 2-wheelers without helmet. So even if there was a law regarding security deposit for tenancy, I doubt it would be easily enforced. It's a market skewed in favour of landlords in a lot of cases.

But @ripe-needle-9726 helmet on 2 wheeler is enforced in major cities and busy areas by police and also there are cameras installed in some places so nowadays people don’t take chances unless it’s an emergency. Similarly if tenants start reporting such landlords to police with proofs (call recording or document regarding deposit) and also get some media attention then landlords will also be forced to ask only 2-3 months’ rent as deposit.

Well, you should try talking to these people about helmets 😂 When I was young and naive, I thought laws were black and white and police would be willing and ready to enforce laws. Now that I talk with lawyers on a regular basis, I understand that laws don't make much difference, unless there is a change of attitude in society. I hate that societies in Pune ask for your marriage certificate and landlords in Bengaluru asks for 10 month deposit from tenants. All one can do is look for someone who will accommodate your demands (which should not be too far from the current norms). The other option is to pay handsomely so no one dares upsetting you 🙂

I think we need to add a landlord perspective here. What happens if the tenant doesn't pay rent for a couple of months? What if there are damages to the property? I've had such instances and a deposit equivalent to 2 months rent is not sufficient to cover the damages. As a thumb rule, a landlord needs to get a deposit of 4-6 times the rent to have sufficient security (it's called security deposit for the same reason 🙂 )

@tall-yacht-73211 Even I am a landlord at a north indian city and in most of north india deposit is only for 2-3months max. If there are damages to property and the tenant doesn’t pay then being a local at the city we have power to involve police, tenant are generally not local and they are at a disadvantage here. Also if you take 4-6months rent as security deposit then you should pay basic interest on the money! Mostly what happens is that landlords don’t pay the security deposit on time and the tenant doesn’t want to involve police as he is non local or may be moving out of city and involving police is always an headache for non local

What happens if the tenant doesn't pay rent for a couple of months?

Don't we have the agreement for this? The terms are decided and if you fail to pay the monthly rent by the 15th of each month, then you need to vacate the premises or legal action can be taken.

What if there are damages to the property?

Agreed that the deposit should be taken. However, for an unfurnished flat, a deposit of Rs 100,000 just doesn't make sense to me. For a furnished flat, maybe, depends on what all things are included. And as @aloof-scooter-95399 mentioned, being a non-local guy just make these things a bit more complicated. I have came across instances where even if there is no property damage, the landlord deducts a considerable amount from the deposit. Now you can involve police, and take it to the court, but then would you? (mostly NO)

@aloof-scooter-95399 involving police is never a nice situation. It's going to be really difficult to recover dues that way. And you don't always rent to non-locals. This might be region specific, but it's much more streamlined in Mumbai. I wouldn't want to offer a furnished apartment without ensuring enough cover against damages. And security deposit has no interest anywhere in the world. .