Tenants pay high security deposit, Bangalore has archiac tenancy law

BENGALURU: For newbies to the city, getting a house is a herculean challenge. It’s not just about finding a house close to workplace to beat the chock-a-block traffic and with a rent that will not burn a big hole in the pocket, but also about dealing with the landlords and answering their questions.

“I thought Bengalureans wouldn’t be judgemental about your marital status and more open minded, but I have found it difficult to convince the owners. They ask too many personal questions if they learn that I am separated and single,” says Bhoomika Juneja who recently shifted from Mumbai.

Expressing a similar view, Dr Mutum, a gynaecologist working in a well-known hospital in JP Nagar, said, “I hail from the northeast. Nobody is willing to rent me a house. I don’t know if it’s because I am a single working woman or for a different reason. Some owners agreed to rent but the locality wasn’t safe.”

The situation is no different for bachelors. “Owners just don’t trust bachelors. They think we drink and party all-night. There are many, like me, who don’t drink,” said Pranay Ramarao, who works at Practo.

“Well some owners’ notion of family too is weird. Wherever I go, owners ask me who all are there in my family. There were some owners who backed out when I said my family consisted of me and my mother. It seemed like family for them had to be a husband, wife and children,” says SP Kowdley, a media professional.

Subbu Athikunte, 38, a software engineer who started a online portal SimplyGuest, said, “Unlike a broker who will leave the tenant at the mercy of the landlord and walk away with his commission of one month’s rent, we first enter into a services agreement with the owner. The owner does not come in contact with the tenant at all and thus there is no possibility of outrageous conditions coming up. Our commission in fact is a part of the rent that the tenant pays the owner and this is settled between us and the owner.”

The startups are getting a large number of house owners who are senior citizens, NRIs and outside Bengaluru. “We take only two months of rent as security deposit and the rent includes charges for electricity, water, maintenance, 30 mbps WiFi, set top box, unlimited LPG and domestic maid. We take care of managing the maid servant as well. It’s a big deal for singles. Bachelors and spinsters get furnished flats at an affordable price without any hassles; they don’t have to worry about flatmates leaving, as we take care of finding new flatmates,” Subbu added.

Some startups are also focused on house hunters. Arjun Kartik, 26, a former Infoscion who founded an online portal, said, “Getting rent each month, maintenance of houses and tenant matchmaking are tiresome jobs and for owners this is not a primary job and hence it becomes a difficult problem. We solve this problem to a great extent thus giving the owners a way to easily manage the properties.”

But the transition is anything but pain-free. Fifty suspected brokers had a few months ago laid siege to a home rental startup and attacked the staffers.

It may be the Startup Capital, but youngsters coming to Bengaluru find it difficult to get a roof over their head, to start with. All thanks to the exorbitant security deposit demanded by house owners.

In most localities, landlords demand 10 months’ rent as security deposit. Only in a few localities like Ulsoor and Koramangala, the security deposit is six times the monthly rent.

For a house with a monthly rent of Rs 15,000, the security deposit is at least Rs 1.5 lakh. And there is no guarantee that all the entire money comes back when you vacate the house. At least 10% of the deposit is kept back towards expenses for painting the house afresh.

“I am from Mumbai, and when I came to Benglauru I had absolutely no idea where to go. I was searching for a place to crash for two days, looking at PG and flats with no luck. Most landlords were asking for a deposit of around Rs 1 lakh. Having joined my first job, I was wondering from where could I get that much money,” says Sneha Nellikkal from Mumbai.

The high security deposit has not left PG market untouched. “I recently paid Rs 30,000 as security deposit to my roommate because she already has an agreement with the landlord along with her cousin. She said if we sign a new agreement, the landlord would increase the rent. It is already so difficult to find a place with reasonable deposit but then you have to take the risk like this,” Nikita Upasak, a designer.

 Karnataka has still not adopted the Model Tenancy Act, 2011. Under Section 12 of this Act, no more than three months’ rent should be collected as security deposit by a landlord. The state government has not made an attempt to bring forth the implementation of this Act unlike Bihar and Tamil Nadu, which has a Rent Control Act.
 The old Karnataka Rent Act gave tenants excessive rights, allowing them stay in a property endlessly. The new Rent Act of 1999, however, went to the other extreme giving more power the landlords. But the Act applies only to properties that have a monthly rent of up to Rs 3,500 , which means it is useless in most of Bengaluru.
An online petition urging CM Siddaramaiah to enact the Model Tenancy Act, 2011, has far got 14,491 supporters.
PropGod Services Pvt Ltd, is a end-to-end real estate management company based at Bangalore. Please visit our portal at www.propgod.com

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