Also called: Rent deposit, Refundable deposit, Advance (south India)
Money the tenant pays the landlord at the start of a rental, held against unpaid rent or damage and returned, less agreed deductions, when the tenant leaves.
How it works and what to check
The amount is a matter of custom and negotiation and differs sharply between cities: a few months' rent in many places, much more in some. The central Model Tenancy Act suggests caps, but it applies only where a state has adopted it.
Write into the agreement the amount, what can be deducted, and the number of days for refund. Photograph the flat when you move in.
Common questions
Is there a legal limit on rent deposit?
Only where a state law sets one, such as a state that has adopted the Model Tenancy Act. Otherwise it is agreed between the parties.
When should the deposit be returned?
On handover, or within the period the agreement states, after agreed deductions.