Moving into a rented home often comes with its own set of security deposits attached. But if you have ever paused before transferring the money and wondered, “Can my landlord actually ask for this much?” , the law has an answer. Under the Model Tenancy Act, 2021, there are limits on how much landlords can collect as a security deposit, and the cap depends on the type of property. For millions of tenants navigating India’s rental market, these provisions offer a firm legal backing.For residential premises, the deposit cannot exceed two months’ rent. In case of non-residential properties such as shops, offices and other commercial spaces, the ceiling is set at six months’ rent. In both cases, the amount must be mutually agreed upon and clearly mentioned in the tenancy agreement.Now that you have paid the security deposit, what happens when it’s time to get it back?The Act mandates that the security deposit be refunded to the tenant on the date of taking over vacant possession of the premises, after deducting any outstanding liability of the tenant. In other words, the landlord cannot simply sit on the deposit once you have moved out.In situations where the premises becomes uninhabitable due to a “force majeure” event, defined under the Act as “war, flood, drought, fire, cyclone, earthquake, or any other calamity caused by nature” and the landlord fails to carry out the required repairs, the security deposit and advance rent must be refunded to the tenant within fifteen days of the expiry of the notice period, after making due deduction of any liability of the tenant.When can a landlord make deductions?Deductions from the security deposit are not unlimited. The Act lays down clear conditions under which a landlord may draw from the deposit. If a tenant fails or refuses to carry out repairs they are responsible for, the landlord may undertake those repairs or remove any unauthorized structure erected by the tenant and deduct the cost from the deposit. The tenant must then settle the deducted amount within one month of receiving notice from the landlord. Should the repair costs exceed the deposit, the tenant remains liable to pay the excess within the same period.The Act also gives tenants a corresponding right. If the landlord fails to carry out their repair obligations, the tenant may undertake the repairs themselves and deduct the expenditure from the rent payable in subsequent months, subject to a cap of fifty per cent of the agreed monthly rent for any single month.
