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Hefty Security Deposits And Damaged Homes: Bengaluru’s Landlord-Tenant Problem

Posted on September 22, 2015 in Society

By Vinay Kumar:

The landlord-tenant relationship has to go hand in hand like a marriage, if not, all hell breaks loose. I have always heard my friends (both landlords and tenants) complaining about tenancy issues, especially in Bengaluru. So, I took this opportunity to speak with few random landlords and tenants in the city to find a common ground that worked in everyone’s favour.


Here is what the tenants had to say:

• Manju – A student from Hyderabad pursuing a BE in CMRIT college, says that paying 10-month security deposit upfront for a house in Marathahalli was not at all easy for him. He had to ask his father – a florist, to help him pay the deposit which they did with a lot of difficulty. Manju mentioned that his father had to do extra hours at his shop & lend money from his relative to arrange the money. He also mentioned that it’s not at all practical for a student to pay such huge amount upfront. He just prays that the landlord returns his security deposit in one piece.

• Biplav – An IT professional who hails from Kolkata, he had to pay a whopping 2.5 lacs as 10-month security deposit for his previous residence in Koramangala. His owner did not compromise on the deposit at all. At that time he thought the money is refundable when he move out. When he actually decided to move out, the owner cut almost 3 months’ rent in the name of painting and other maintenance. Biplay mentioned that there was no need for any painting since he had maintained the house like his own, No nails on the wall except for few airline cracks which happen due to climatic changes. Also, during his stay, the rent was revised every year without any kind of logic behind it.

• Mahesh – Professor by profession, he stays in A Narayapura. He mentions that he had the best landlord because they had settled for 5 months deposit and a very reasonable rent. But everything changed when he decided to move out of the house. The landlord cut 2 months’ rent as maintenance and he got just 50% of the remaining deposit even when he had given the landlord a one month notice as per agreement. Mahesh had to run behind the landlord for almost 6 months to get his remaining money.

Many tenants are taking to social media to cut down the 10 month security deposit in Bengaluru with an online petition started by a team from Flat Gradings urging Honorable Chief Minister Mr. Siddaramaiah to enact the Model tenancy act in the state. This petition has got a lot of public attention with more than 13k signatures.

Next I spoke to few owners and this is how the conversation went:

1. Why do you ask for a 10-month security deposit?
Bengaluru is a costly city and we have invested lakhs on the house. We pay high EMI’s on loans every month. So, the only way to keep our property safe from any damage is to collect 10-month security deposit. What if we agree to a month’s security deposit like other cities, and the tenant locks the house and absconds? What if the tenant causes too much of damage which would cost us a hefty amount to repair them?

2. What kind of damages are these?
At times, we have seen too many nails hit on the wall which leads to many cracks. My tenant’s kid had drawn on many walls. Geyser was not working. Few floor tiles had cracks. There was an instance where tenants didn’t pay electricity & water bills before vacating.

3. How do you justify cutting hefty amount from security deposit while moving out?
We do not cut hefty amount, rather it’s just a reasonable amount. Fixing the cracks on walls is not easy since filling cracks, painting two coats and labour come at a high cost. I would suggest every tenant to go and check the costs before fighting with us.

4. Why do you charge high rent per month?
We have enquired from most of our neighbors about how much they charge as rent and then we decided on pretty much the same amount. So, in our opinion it’s not high, rather it’s a normalized amount.

Based on the conversation I see that a lot of improvement is needed in existing tenancy laws and to my surprise recently the NDA government has readied The Draft of Model Tenancy Bill, 2015 which might strike the right balance between landlord & tenants to an extent with few highlights:

However, it may not cover two important points which are often the reason for conflicts:

1. The landlord’s interest in protecting his property from damage during the tenant’s stay.
2. Landlords deducting part of the security deposit because of damage maintenance.

I see 2 viable solutions which could help the Indian rental industry:

1. Insurance – It is the best way to cover any kind of damage. And in this case home insurance can give the owners a sense of relief. But insurance comes at a reasonable cost – So who pays the premium every year? Both the tenant and owner should come to terms with this and it should be mentioned in the rental agreement. A small fee every year can save the huge security deposit cut at the end of tenure. This will be a win-win situation for both parties.

2. Property Managers – Considering the scenario that both parties do not opt for insurance and the tenant vacates the premises. Landlords cut some part of security deposit as part of maintenance without providing any kind of justification. So, what if there are third party companies (property managers) who can make a detailed study of the house (before tenants occupy the house and after they vacate) and provide the exact quote of damage with receipts? With so much transparency, tenants won’t think the landlords are being unreasonable because these property managers would not be biased towards any party and they would also provide receipts for every repair they make. This could strike the right balance and both parties wouldn’t have to break their agreements.