What about a non-refundable brokerage or maintenance fee?

Brokerage paid to an agent, or a genuine one-time service fee, can legitimately be non-refundable — but that's a separate charge, not your security deposit. Don't let a non-refundable fee be disguised as part of the deposit.

What should I do if my agreement has a non-refundable deposit?

Negotiate it out before signing — ask for the full deposit to be refundable with a clear refund timeline. If the landlord won't budge, at least get the non-refundable amount and its reason stated separately and in writing.

Is a Non-Refundable Security Deposit Legal in India?

Updated 22 June 2026

Short answer: a security deposit is meant to be refundable, so a "non-refundable security deposit" is a contradiction — and a red flag you should question before signing. Here's what's actually going on.

What a security deposit legally is

A security deposit is money you hand over as security against unpaid rent/bills and damage beyond normal wear and tear. It's the landlord holding your money, not earning it. When you leave with no dues and no damage, it should come back in full. That's the whole concept — which is why "non-refundable" doesn't fit it.

So why do some agreements say "non-refundable"?

Landlords sometimes carve out a chunk of the deposit as non-refundable — labelled "maintenance," "goodwill," or "painting." This is really an extra charge dressed up as part of your deposit, and it's worth pushing back on. A genuinely separate, disclosed fee (like brokerage paid to an agent) can legitimately be non-refundable — but it shouldn't be folded into, or called, your security deposit.

What the Model Tenancy Act says

The Model Tenancy Act 2021 frames the deposit as refundable (recommending a cap of two months' rent for residential), to be returned at the time of vacating after lawful deductions. Adoption varies by state, but the principle — deposit = refundable security — is the baseline to argue from.

What to do if your agreement has one

Negotiate before signing: ask for the full deposit to be refundable, with a clear refund timeline.
If a fee really is separate (e.g. brokerage), make sure it's stated separately, not as part of the deposit.
Get any non-refundable amount, and its reason, in writing — vague "non-refundable" wording is the real danger.

Check it before you sign

FinePrint flags a non-refundable deposit (and other deposit traps) in your specific agreement automatically. See also security deposit rules in India and how to get your deposit back.

General information for Indian tenants, not legal advice.

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FAQ

Is a non-refundable security deposit legal in India?: A security deposit is by definition refundable security against damage and dues — a 'non-refundable security deposit' is a contradiction and a red flag. Landlords sometimes label part of it non-refundable (e.g. for 'maintenance' or 'goodwill'); that's worth disputing before you sign.
What about a non-refundable brokerage or maintenance fee?: Brokerage paid to an agent, or a genuine one-time service fee, can legitimately be non-refundable — but that's a separate charge, not your security deposit. Don't let a non-refundable fee be disguised as part of the deposit.
What should I do if my agreement has a non-refundable deposit?: Negotiate it out before signing — ask for the full deposit to be refundable with a clear refund timeline. If the landlord won't budge, at least get the non-refundable amount and its reason stated separately and in writing.