A landlord asks for ten months’ rent as a deposit.
For most of this year, the advice going round was that the law had limited it to two. It hadn’t. Karnataka never adopted the rule that said so, and at the rents in this city’s gated societies the state’s Rent Act does not apply at all.
So the deposit is a negotiation, and it helps to know where the number comes from.
What the law says, which is very little
The Karnataka Rent Act does not apply to a home whose rent is above ₹3,500 a month in the areas in Part A of its First Schedule, or above ₹2,000 anywhere else.
KARNATAKA RENT ACT, 1999, SECTION 2 · IN FORCE 2001 · CHECKED 27 SEP 2026The January 2026 amendment to that Act replaced jail terms with fines and left deposits alone. The two-month limit came from the Model Tenancy Act, a central template Karnataka has not passed.
Nothing caps the deposit on a home at these rents. Four to six months is what the market asks. Ten still turns up.
What did and didn’t change in January has its own note. What the law actually says.
Where the number actually comes from
An owner we work with asked for ₹5,00,000. We asked why that much.
Her answer: she owes ₹5,00,000 to the tenant moving out, and she wants the same amount in so she does not have to find it herself.
Your deposit is often the last tenant’s money, passed along.
Nobody priced that figure against the rent, the risk or the condition of the home. It is a liability handed down a chain, and each link keeps whatever the one before it set.
- It rarely comes down, because a lower deposit means the owner funds the gap, on the day they are already without a tenant.
- It drifts away from the rent. A flat let at ₹80,000 some years ago with ₹5 lakh down may ask ₹1,00,000 now and still want the same ₹5 lakh.
- It comes back when the next tenant pays theirs. An owner who could not bridge the gap going in may not be able to coming out.
What you can negotiate
Arguing the amount down usually goes nowhere, because the constraint is the owner’s cash on one particular day. What moves is how and when the money lands.
- Pay it in two parts, one at signing and one on the outgoing tenant’s exit date.
- Pay it straight to the outgoing tenant, with the owner’s written agreement.
- A lower figure, where the owner can carry the difference for a few weeks.
- The return date, in days after handover, written into the agreement.
Getting it back is the larger risk
The chain matters most at the end. If the owner is relying on the next tenant’s deposit to repay yours, your money comes back when that tenant arrives, which may be well after your notice date.
- The amount, in figures and words, in the agreement.
- Who holds it, by name, and the account it went into.
- The date it is returned, counted in days from handover.
- What may be deducted, and on what basis.
A deposit this size should never be a verbal arrangement. What can be deducted from your deposit.
And then there is cash
This is where we draw a hard line.
A deposit of this size should not disappear into a cash handover backed by a WhatsApp message saying “received”.
- A proper rental agreement.
- The deposit amount recorded in it.
- A clear payment trail through a bank.
- The landlord’s written acknowledgement.
- The terms governing its return, in writing.
Cash leaves you with no clean record of where your money went, or of what you are owed back.
Checked against the Karnataka Rent Act and its 2025 amendment on 27 September 2026. Not legal advice. The owner’s reasoning above is one conversation, shared without anything that identifies her.
