My wife and I decided to move to Bangalore after our wedding in May. Our biggest concern about our move to Bangalore was the archaic practice of landlords here insisting on extracting a security deposit equal to 10 months rent for leasing out any property.
From the beginning we were clear that we were not going to pay, what can only be described as an outdated and unnecessary travesty.
We moved here in July. Fortunately for us my wife’s parents live here so there wasn’t a real sense of panic about our search, ofcourse we did want to find our own place as soon as we could.
As the search began it became quite clear that the practice didn’t just influence more ‘traditional’, ‘old school’ and ‘uneducated’ landlords, as seems to be the misnomer amongst a lot of outsiders, it affected everybody across every imaginable background. The 10 month deposit seemed to be a convenient bandwagon for every kind of landlord from every possible background to jump on. I guess the lure of a sizeable chunk of money makes drooling idiots of us all.
We met potential landlords from every background, all demographics, every religion, creed, what-have-you and the response did not change; well neither did our resolve (given the luxury of the in-laws house, which made things a little easier). We heard all forms of justifications, reasons, litanies as to why we should part with such amounts of money as our well thought out arguments fell upon deaf ears. I will discuss these reasons in the sections below, but before I do I have to mention that we did eventually find a beautiful house, in the locality we wanted and we didn’t pay a 10 month deposit. Yes, it took us two months to find the place and negotiate like crazy but we persevered to ensure that tomorrow our landlord does not hold our lives ransom whenever it is that we decide to vacate the place.
I will now list out a step-by-step guide of what we learnt from our experience and what you should keep in mind when renting a house in Bangalore and are looking to pay no more than 2 month’s deposit.
- When searching for a house be as diverse in your search as possible. Word of mouth and paper classifieds are good starting points but online is where the major volume of ads are palced. That being said, remember that beyond the big real estate websites also look at the smaller more multi-purpose ones like commonfloor, craigslist, sulekha, olx etc,.
- Search for owner listed properties, it is always best to talk to the owner directly as opposed to through a broker, as brokers are generally unwilling to affect the norm in any way. And it’s always best to make your own case to someone who has the power to make a decision instead of convincing a broker first and then having to do it all over again with the owner. This ofcourse comes with an exception discussed later in this article.
- Word-of-mouth contacts can often be best kind of contacts in respect of negotiating a deal because they can’t use any of the usual excuses as to why they want a huge deposit as they are ‘known’ to you.
- Post your own classified ad on as many sites as possible. And specify clearly that you should only be contacted by landlords who do not require anything above two months’ deposit. This way, when they call you even if they are looking to negotiate, you will have the higher ground.
- As stated before, always look to negotiate with the owner.
- The process of negotiation will always have its own dynamics. The owners will have their own reasons, both reasonable and unreasonable, we have heard everything from ‘I need this money to pay off my loan’ to ‘My house costs x-lakhs, I need to secure it cause you sound like a shifty cheat (as if to say I could run away with it)’ but usually after a little fencing most Landlords will come down to this bottom line ‘This is how things are done in Bangalore and that’s why you should pay me’. As unlikely as it seems it is at this stage that you will usually be able to talk some sense into the landlord. Not often but on occasion you will have a reasonable guy who will see sense, or the lack thereof, in this practice when faced with a simple ‘other than the practice is there any other reason for you to demand this deposit?’.
One piece of advice for this negotiation is anticipate all their questions and be prepared with responses e.g., for ‘I have to pay off my Loan” your response is the obvious “So, what happens when you have to pay me back?”. Similarly, all their arguments will have obvious holes so where you find a landlord willing to reason, be prepared. A gem I found in response to the ‘It’s always been this way in Bangalore’ response was, that the reason it was ‘this way’ in Bangalore was because the Karnataka Tenancy Act was an overtly tenant friendly law when it was originally brought into force, this was the reason that landlords decided to secure their properties with a 10 month deposit. However, since the 2002 amendment to this Act the law has actually been made far more balanced and both landlords and tenants have a much more equal relationship, thereby doing away with landlords to feel insecure and demanding 10 months deposit as security. At this point of time you will hear the sound of glass breaking, your future landlord has just dropped the glass of juice he was sipping.
- Now we come to the exception of the self-negotiation. Where you don’t want negotiate yourself, for whatever reason, find a good broker, not someone who has advertised a house that you’re responding to but someone you have found independently. Assign your broker the task of finding you a place with the stipulation of paying only two months’ deposit. Incentivise, if necessary by offering the broker a higher commission than he would normally make on this kind of a rental.
- When negotiating on the deposit never fall into the trap of higher rent against lower deposit, a lock-in penalty for any lease termination, unreasonable termination notices etc. Remember your rent and your deposit are two different things, as are your lease terms, you should link one with the other and set-off any consolations made for one against the other.
- Ridicule and outrage are also two other good tools that were suggested to me when I was myself negotiating for the deposit. Laugh when the landlord suggests a 10 month deposit or react with complete outrage. Remember even if you don’t get the house, you have sent a message across that things are changing and that there are people out there who find the idea ludicrous. If a landlord hears this a few times from his market, maybe he will understand that it is he who needs to change.
- Always quote examples of how everywhere else in the world people live in apartments with one month rent as security deposit. If your landlord is a little worldly and has lived in rented accommodation himself, he is likely to see some sense in this argument and relent.
- Another strategy is to give your landlord the impression that you have never had to pay more than a 2 month deposit, even in Bangalore. Peer pressure can work wonders.
- Typically, your chances of being able to negotiate with a landlord who has just bought a house or an apartment will always be better than with someone who has a place just ‘lying around’. The former will always have a greater need to rent out the property to start earning returns and paying back in loan. Ofcourse this can backfire, with the “Give me the deposit cause I have to pay back my loan” class of people. That notwithstanding it will still get you better results than people who do not have such pressures. So look for rental ads for newer apartments and negotiate hard with such people.
- Usually avoid landlords that have dietary, religion or such restrictions. These people are generally closed minded and speaking with them is generally a waste of time and a test of patience.
- Landlords who live in other cities and in rented accommodations themselves will sometimes acknowledge how they pay only a month’s deposit but since this is Bangalore and custom is custom, expect you to cough up a lung-and-a-half. Once something to this effect is said, understand that you are dealing with a troll devoid of logic. This guy is not interested in your argument, no matter how nuanced, fate has dealt him a lucky card and he is going to milk it.
- I repeat – DO NOT set-off rent against a reduction in deposit.
- Always talk to owners directly (the exception above notwithstanding).
- Post a wanted ad specifying your precise requirements on as many online and paper classified forums as you can.
- Make a list, with numbers, of landlords who refuse to relent on the deposit front and post it on this website.
- Once you have found a place remember to have clear terms in your lease regarding circumstances under which money may be deducted from your deposit and a notification/consent provision that requires your landlord to not deduct unilaterally. A 2 month deposit is still your hard earned money!
- When paying rent or deposit always pay by cheque so that the transaction is recorded. This will help if your landlord has decided to be overwhelmed by the need to be dishonest and refuses to refund your deposit.
- Always stamp your lease adequately. Remember an un-stamped lease cannot be admitted as evidence in court. Ofcourse you can do this at a later stage too, but you will have to suffer through the compounding charges.
- If the lease is longer than 12 months you will need to get it registered.
- Be patient. You will not find a house in a day or maybe even a week but if you persevere you definitely will.
I will conclude with a little story.
There were three monkeys who were part of science experiment. Their names were A, B and C. The scientists placed a bunch of bananas in the monkeys’ cage and a step ladder for the monkeys to be able to reach the bananas. However, every time a monkey tried to climb the ladder to reach the bananas the other two monkeys on the ground would get drenched in cold water. Eventually the monkeys on the ground co-related the two events and started pulling whichever of them tried to climb the steps.
In time monkey A was replaced by monkey D. And to his surprise every time monkey D tried to climb the steps the other two monkeys pulled him down. After a few more months Monkey B was replaced by Monkey E and a further few months later Monkey C was replaced by Monkey F. None of these monkeys had ever been sprayed with cold water yet due to their conditioning every time one of them tried to climb the steps the other two would pull him down. They didn’t know why they were doing this just that they were.
The 10 month’s deposit also has similar characteristics. As with every practice, custom, more it originated to satisfy a need that existed at that time, however that need has since long disappeared but sadly the monkeys continue to pull each other off the steps.