Can Landlord Keep Security Deposit For Breaking Lease?

In addition to the first month's rent, a renter who moves into a rental property must also pay a security deposit to the landlord. If the renter complies with the conditions of the lease agreement, the deposit will normally be refunded to the tenant at the end of the lease term. However, many landlords usually think, whether “Can landlord keep security deposit for breaking lease?”

According to my research, a landlord can keep the security deposit if the tenant violates the terms of the lease, damages the property, or fails to pay the rent.

At the time of moving into the rented property, the renter must pay the landlord a substantial security deposit. It is kept for the duration of the lease and refunded when it is completed. The fact that this money is set aside for unanticipated events that can occur during the tenancy makes it essential for the landlord. For instance, the landlord may utilise the security deposit for repairs or rental compensation if the tenant violates the terms of the lease, damages the property, or fails to pay the rent.

The Model Tenancy Act, 2021 stipulates that the renter shall pay the security deposit in advance.

For residential properties, it cannot be more than two months' rent, and for non-residential properties, it cannot be more than six months. The security deposit is non-taxable and must be returned when the property has been inspected and the tenant has left the premises within the allotted time. The security deposit is not covered by the same rules because it is a one-time payment, even though a salaried employee's monthly rent is under Section 10(13A) of the Income Tax Act, 1961. The cost of fixing any damage the renter causes to the property, such as holes in the walls or broken windows, can be deducted from the security deposit.

However, expenditures for repairing normal wear and tear cannot be deducted from the security deposit.

To protect the landlord's interest in the event of property damage or unpaid rent, a security deposit is needed. According to the Model Tenancy Act, the landlord is allowed to take rent arrears and other repair costs from the security deposit before returning the remaining amount after the tenant vacates the property and the lease expires.

If nothing else is specified in the rental agreement, it is the landlord's obligation under the Act to take care of any necessary structural repairs, whitewashing, external electrical wiring, and other maintenance-related issues. The day-to-day maintenance of the home, including drain cleaning, switch and socket repairs, kitchen fixture repairs, and replacement of glass panels in windows and doors, will be the renters' responsibility.

They will also be accountable for housing wear and tear as well as maintaining gardens and open spaces.

A legal rental agreement should be written to avoid any dispute at the conclusion of the tenancy.

The following requirements should be met by the agreement:

• Both the landlord and the tenant must sign it.

• The security deposit amount should be specified in the agreement.

• It must be filed with the sub-registrar office to become a contract with legal force.

• To prevent disagreements, the agreement should specify both parties' obligations in detail.

I’d like to conclude my answer here about  “Can landlord keep security deposit for breaking lease?” I hope this helps:)

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