ATA Section 11 : Security Deposit

Explanation using Example

Example 1: Residential Premises Security Deposit

Introduction: Rina, a tenant, is renting a two-bedroom apartment in Guwahati, Assam. The monthly rent is INR 15,000. She is negotiating the terms of her tenancy agreement with her landlord, Mr. Sharma.

Application: According to Section 11(1)(a) of The Assam Tenancy Act, 2021, the security deposit for residential premises should not exceed two months' rent. Therefore, the maximum security deposit Rina can be asked to pay is INR 30,000 (2 x 15,000).

Outcome: If Mr. Sharma demands a security deposit of INR 45,000, it would be a violation of Section 11(1)(a). Rina can refuse to pay more than INR 30,000 and may seek legal recourse if pressured to pay more. Non-compliance by the landlord could lead to legal action, potentially involving penalties as per the Act.

Conclusion: Compliance with the security deposit limit ensures fair practice and protects tenants from excessive financial burdens. Rina's understanding of this provision helps her negotiate effectively and avoid overpayment.

Example 2: Non-Residential Premises Security Deposit

Introduction: Arjun plans to lease a commercial space in Dibrugarh, Assam, for his new restaurant. The agreed monthly rent is INR 50,000. He is finalizing the tenancy agreement with the property owner, Ms. Das.

Application: As per Section 11(1)(b) of The Assam Tenancy Act, 2021, the security deposit for non-residential premises should not exceed six months' rent. Therefore, the maximum security deposit Arjun can be asked to pay is INR 300,000 (6 x 50,000).

Outcome: If Ms. Das requests a security deposit of INR 350,000, it would breach Section 11(1)(b). Arjun can legally challenge this demand, ensuring he only pays up to the permissible limit. Ms. Das's non-compliance could result in legal consequences, including potential fines or the need to adjust the agreement.

Conclusion: Understanding the legal limits on security deposits helps Arjun protect his financial interests and ensures that landlords adhere to fair leasing practices.

Example 3: Refund of Security Deposit

Introduction: Priya, a tenant in Jorhat, Assam, is vacating her rented apartment after a two-year stay. Her monthly rent was INR 20,000, and she had paid a security deposit of INR 40,000.

Application: According to Section 11(2) of The Assam Tenancy Act, 2021, the security deposit should be refunded on the date Priya vacates the premises, after deducting any liabilities.

Outcome: If Priya left the apartment in good condition with no outstanding rent or damages, Mr. Khan, her landlord, must refund the entire INR 40,000 on the day she vacates. If Mr. Khan delays or refuses to refund the deposit without valid deductions, Priya can take legal action to recover her deposit.

Conclusion: This provision ensures tenants receive their rightful deposits promptly, fostering trust and accountability in landlord-tenant relationships.

Example 4: Deduction from Security Deposit

Introduction: Suresh rented a shop in Tezpur, Assam, with a monthly rent of INR 25,000. He paid a security deposit of INR 150,000. Upon vacating, there were damages to the property amounting to INR 20,000.

Application: Per Section 11(2) of The Assam Tenancy Act, 2021, the landlord can deduct the cost of damages from the security deposit before refunding the balance to Suresh.

Outcome: The landlord, Mr. Patel, deducts INR 20,000 for repairs and refunds INR 130,000 to Suresh on the day he vacates. If Suresh disputes the deduction, he can request an itemized bill or seek mediation or legal advice to resolve the issue.

Conclusion: This provision allows for fair deductions while ensuring tenants are refunded promptly, maintaining transparency and fairness in tenancy agreements.