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We vacated a shared flat and found replacement tenants ourselves, but the landlord is refusing to return our security deposit. What are our rights?

Updated · 6 July 2026

A landlord can only retain a security deposit to cover actual, documented losses — unpaid rent, damage beyond fair wear and tear, or deductions explicitly permitted in the tenancy agreement. If you found replacement tenants whose deposits have already been collected by the landlord, retaining your original deposit in addition is unjust enrichment and has no legal basis. Send a demand notice and, if unpaid, pursue recovery through a consumer complaint or civil suit.

What can a landlord legally deduct from a security deposit?

The landlord's right to retain any part of a security deposit is limited to:

(1) Unpaid rent for the period of the tenancy;

(2) Damage to property beyond fair wear and tear — ordinary scuff marks, minor paint fading, and comparable everyday wear do not qualify; the landlord must produce estimates or invoices for claimed damage;

(3) Unpaid utility bills or charges explicitly agreed to be the tenant's liability under the tenancy agreement;

(4) Any other deductions expressly permitted in the written tenancy agreement;

(5) Deductions must be itemised and documented — a landlord cannot withhold an amount without specifying what it covers;

(6) Proportionality — if multiple co-tenants share a deposit, each departing tenant is entitled to their proportionate share; the continuing tenancy of one co-tenant does not forfeit the others' contributions;

(7) Under the Model Tenancy Act, 2021, if the landlord fails to refund within one month without written reasons, the tenant can approach the Rent Authority for recovery with interest.

What is the position when replacement tenants have moved in?

When a landlord collects deposits from incoming tenants who replace the outgoing ones:

(1) Unjust enrichment — the landlord now holds two deposits for the same rooms; Indian Consumer Commissions and Civil Courts have consistently found such dual retention to be unjust and without legal basis;

(2) Agreement terms govern — if the tenancy agreement specifies how deposits transfer on a change of tenant, that clause applies; in the absence of any such clause, the general principle of refund subject to documented deductions applies;

(3) Verbal or WhatsApp agreement by the landlord that the replacement tenants’ deposits would be passed back to the outgoing tenants is enforceable — preserve all such communications;

(4) Co-tenant scenarios — where one original tenant stays and the others leave, the departing tenants’ proportionate share of the deposit is refundable; the remaining tenant’s continued occupancy does not give the landlord the right to absorb the departed tenants’ contributions.

How do I recover an unlawfully withheld security deposit?

Step by step:

(1) Send a formal demand notice via registered post (and email/WhatsApp for speed), specifying the amount due, the basis for refund, and a 15-day deadline — this is the prerequisite for most legal routes;

(2) Consumer Commission — landlord-tenant security deposit disputes are maintainable as consumer complaints; District Commission handles claims up to ₹50 lakh; seek the deposit amount + interest (9–12%) + mental harassment compensation (₹10,000–₹50,000 typically) + costs; filing fee is nominal;

(3) Rent Authority / Rent Tribunal — in states that have adopted the Model Tenancy Act, these are the prescribed forums and are generally faster than civil courts;

(4) Civil suit for recovery under Order 37 CPC (Summary Suit) — available where the amount is documented; decree typically within 4–9 months;

(5) Section 318 BNS (cheating) — in clear cases of fraudulent retention where the landlord had expressly committed to return the deposit, a police complaint is an option and often an effective deterrent;

(6) Practical leverage — do not sign any 'no-objection', 'no-dues', or vacating letter that does not explicitly address the deposit dispute; signing such documents may be used against you.
Reference Citation: Model Tenancy Act, 2021; Transfer of Property Act, 1882; Consumer Protection Act, 2019; BNS 2023 Section 318; State Rent Control Acts (Maharashtra, Delhi, Karnataka, Tamil Nadu)

Disclaimer: Content provided here is for general legal knowledge only and does not constitute formal legal advice. If you have an urgent or specific matter, please consult a registered advocate.