Important Rent Deposit Rules Of Model Tenancy Act, 2021

Latest Rent Security Deposit Rules In India 2025

Rent security deposit rules in India state that a substantial amount of rent should be kept as a security deposit to the landlord through the tenancy period. 

However, the deposit must be returned to the tenant after the lease period expires. This security deposit is kept by the landlord to repair any damage caused during the lease period. 

Rent Deposit Rules India

As per the Model Tenancy Act, the security deposit should be paid in advance. 

This act also states that it is the responsibility of the landlord to arrange whitewash, repairs, and external electrical wiring on a timely basis as per the rental agreement. The tenant will take care of the daily cleaning of the property. 

The rent agreement should fulfil the conditions:

• The rent agreement must be signed by both the parties mutually 
• The rent agreement should clearly mention the amount of the security deposit and the rent for every month
• To bind the rent agreement legally, it is important to register it at the sub-registrar’s office
• The rent agreement should also state the rights and responsibilities of both parties clearly. This will help in settling or avoiding any future disputes

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Important Factors Of Security Deposit

The landlords and tenants should understand the following factors before agreeing with the security deposit:

• The rental amount received from the tenant should be declared in the rental agreement.
• The agreement should also state that the security deposit will be returned as the agreement expires or the tenant vacates the premises.
• The agreement should also mention that if any amount will be deducted from the security deposit, then the homeowner should justify it.
• The contract must be legally registered and signed by both parties. 
• There should not be any hidden clause in the agreement.

Model Tenancy Act Rules For Renting

The rules of the Model Tenancy Act are explained in the below points:

• During the time of revising the rent between the landlord and the tenant, it should be as per the rules of the Model Tenancy Act. However, the landlord should provide three months prior notice to the tenant regarding rent revision. 
• If the tenant has not given any termination notice after receiving the rent revision notice from the landlord, then the tenant is deemed to have accepted the rent revision. 
• The tenant should pay 2 months’ rent as a security deposit in the case of a residential apartment, and 6 months’ rent in the case of commercial property. 
• The security deposit must be returned to the tenant as they vacate the property after deducting any liability. 
• The landlord can visit the property anytime during the lease period. However, it is necessary for the landlord to provide a 24 hrs prior notice of visiting the tenant through an electronic medium. The visiting time should be between 7 am to 8 pm on the specified date. 
• Any landlord or tenant should not cut off or reserve any essential supply or service by themselves or through any other person on the property premise occupied. 
• The rent authority appointed should be the District Collector, who will have previous approval of the State/UT Government.  

Refund Of Security Deposit

The security deposit is used to safeguard the landlord’s interest in the case of any damage to the property. The Model Tenancy Act helps landlords to deduct arrears of rent or repairing costs from the deposit. 

At the end of the period or during the time when the tenant vacates the property, the amount should be refunded. 

It is important that a rental agreement should be made properly to avoid any future dispute during the time of settlement. 

House Rent Deposit Rules

The deposit amount should not exceed two months’ rent in the case of residential property. 

For commercial property, the amount should be equal to six months of the rent amount. As per the Model Tenancy Act, the rent security deposit is non-taxable and can only be transferred after inspecting the property during the time the tenant vacates the property. 

However, it should be noted that everyday wear and tear should not be included in the repair cost. Any major damage caused is only counted as damage and deducted from the security deposit. 

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