Landlord refusing to return your deposit? Here's exactly what Indian rental law says, the evidence you need, and how escrow protects you from day one.
Across Bengaluru, Mumbai, Gurugram, and Hyderabad, security-deposit disputes are the #1 reason tenants and landlords end up in consumer court. The Model Tenancy Act 2021 caps residential deposits at 2 months' rent and commercial at 6 months — yet most landlords still demand 6–10 months in cash, then deduct arbitrarily at move-out.
What the law actually says
- MTA 2021 (where adopted): residential cap 2 months, commercial 6 months.
- Karnataka, Maharashtra, Delhi: state-specific Rent Control Acts apply — typically 10 months in Bengaluru by custom, not by law.
- Deductions must be itemised, reasonable, and supported by photo/receipt evidence.
Evidence checklist before you move in
- Date-stamped photos of every wall, fixture, appliance — both rooms and exteriors.
- Signed Move-In Condition Report countersigned by the landlord (or their agent).
- Copy of the rental agreement registered under the relevant state Act.
- All deposit payments via UPI/bank transfer — never cash without a receipt.
How Propey escrow ends the dispute
When your deposit sits in a regulated escrow (not the landlord's personal account), neither party can move the money unilaterally. At move-out, our Move-Out Settlement engine compares your Move-In Report to the Move-Out Report photo-for-photo. Any claim above ₹500 needs an itemised invoice. Disputes go to DisputeDesk — independent reviewers decide within 7 working days, and the money releases automatically.
If you're already in a dispute
- Send a formal demand notice via registered post, citing your state Rent Control Act.
- File a complaint with the District Consumer Disputes Redressal Commission (free up to ₹50L claim).
- Attach the rental agreement, bank statements showing deposit transfer, and your evidence pack.