According to reports from Mint, PG deposits are legally treated as residential rental deposits, meaning refund is not optional for landlords. Under legal terms, landowners are under binding obligation to return the deposit after deducting only legitimate charges. The law guarantees that tenants have the right to live in a clean, safe and hygienic environment, with landlords required to ensure properties meet basic living standards including fire safety, adequate ventilation, clean drinking water access, and functional electrical systems.
As reported by Mint, every PG tenant has the right to peaceful vacant possession of the premises upon lease expiry or early termination, with the landlord simultaneously required to refund the security deposit. The law protects against unjustified eviction, ensuring PG owners cannot force tenants to vacate without valid reasons. If landlords refuse to refund deposits, tenants can send legal notices or approach consumer courts for resolution. PG agreements must clearly detail rental terms including security deposit amounts, monthly rent, payment terms, refund policies, and house rules.
According to Mint, a Delhi High Court ruling dated March 22, 2024 established important tenant protections. The ruling states that upon lease expiry, the tenant must handover peaceful vacant possession, and the landlord must simultaneously refund the security deposit. The refund is subject to deductions only for arrears in rent, service tax, unpaid electricity charges, and paid water charges up to the handover date. In cases of default by the landlord, tenants have the right to use the premises free of lease rent until actual refund, with such holding not deemed as trespass.
Legal experts emphasize that security deposits are not unrestricted sources of recovery for landlords. As Madhura Samant from Elarra Law Offices explains, any deduction should have a legitimate contractual or legal basis and be linked to identifiable dues or actual damage attributable to the tenant. According to Fazl Askari from PSL Advocates & Solicitors, a security deposit is the tenant's own money held only as security against proven dues. The distinction is crucial between actual damage and normal wear and tear - faded paint, minor scuff marks, and aging fixtures generally fall under normal deterioration that cannot be passed on to tenants. Under Section 108(m) of the Transfer of Property Act, 1882, faded paint, minor scuff marks, ageing fixtures, and carpets wearing out over time are generally considered normal deterioration resulting from ordinary occupation.
As reported by Mint, the Satya Niketan building collapse incident has highlighted PG owners' reluctance to refund security deposits, with videos circulating on social media showing landlords refusing to return deposits to students evacuating unsafe buildings. This incident has raised broader safety concerns beyond deposit refunds, bringing PG accommodation practices into the spotlight and emphasizing the need for tenants to understand their legal rights to protect themselves from exploitation. Recent cases like the Bengaluru tenant who received only ₹19,000 of a ₹1.3 lakh deposit after two years demonstrate the ongoing challenges tenants face in recovering their security deposits.
