In Mumbai most of the residential property owners follow a simple rule. The rent is a package and the package is divided into rent plus security. For every Rs one lakh of security that one pays, the rent decrees by Rs 1,000 per month.
Take the case of Amit Tandon, a bachelor working with KPMG in Mumbai, who shares his three bedroom apartment with his two friends. Their monthly rent package was Rs 30,000 but after paying a whooping security of Rs five lakh, they have managed to reduce the monthly rent by Rs 5,000 to Rs 25,000. Says Amit, "This is a simple rule that is followed in most places in Mumbai. And The security amount has to be paid before shifting." If it is a furnished flat, a landlord takes deposits that cover the assets of his flat.
But when does the tenant get the refund. "Ideally before one leaves, one should get the refund. Normally there is a month's notice during which time the landlord has to arrange the money," says Amit.
If you are a bank a employee in Mumbai, then the bank provides support for security deposit and then it becomes a bank lease. The tenants pay the bank and the landlord is paid by the bank. Nearly all banks in Mumbai property markets help their employees with security deposits, and this is basically part of their perks.
However, banks intervene only in case it is a bank lease. But banks generally do not intervene unless there is an issue still the responsibility is with the tenants to recover this money.
Security system is different in Mumbai and southern cities. In the property markets of southern cities of Bangalore and Chennai, ten months rent as deposit is the general rule. But in Mumbai Property market there is no concept of how many months of security deposit. The amount paid per month as well as security deposit depends on location, and varies significantly in different parts of Mumbai, based floor, sea facing or non sea facing and finally it depends upon how you negotiate the deal.