A tenant on Reddit has stirred a debate over renting practices in Mumbai, stating that his landlord withheld a security deposit of almost ₹1 lakh unless the 1BHK property in Chembur was returned in freshly painted condition. The tenant claimed that the deposit was much larger than the expected cost of repainting the unit and requested opinion on whether the landlord’s demand was reasonable.

In a Reddit post, the tenant said he informed his landlord of his decision to depart a rented one-bedroom apartment in Chembur following contract expiration and demanded the refund of his security deposit. However, according to the post, the landlord stated that the flat was freshly painted before being let out and that it needed to be returned in the same condition before discussing a refund.He was promised that because he painted the house while leasing it, he would get it back in the same condition, and he is unwilling to discuss the deposit refund. And the paint was already peeling and chipping shortly after moving in. When you touched the wall, the paint flaked off, and the furniture also left marks. “The place isn’t the same at all,” the tenant commented on Reddit. “We didn’t bother back then with the paint or anything because the place was a necessity.” The owner of the new apartment I am moving into told me to wait until he finished painting it and handed it over. Is it truly usual to take the tenant’s deposit for this reason? I’d like to know how to manage this. The security deposit was more than one lakh, and I’m not sure how much it takes to paint a little one-bedroom apartment. “Help, I’m really struggling,” he continued.

A common tenant-landlord dispute involves withholding the security deposit for repainting.

Security deposit deductions for repainting and restoration work are a frequent source of disagreement between landlords and renters when a lease expires.

Can landlords deduct painting costs from security deposits?

According to real estate specialists, there is no explicit law governing security deposits, and residential rental agreements are not subject to the Real Estate (Regulation and Development) Act of 2016. Landlords and tenants must grasp the provisions of the rental agreement before any disputes arise. Typically, landlords only deduct security deposits for significant property damage. I once handled a case in which a tenant’s kid drew on the walls of a freshly painted living room. Although the landlord spotted the damage throughout the tenancy, it was not addressed until the tenant vacated the unit, at which point a sum equal to one month’s rent was removed to pay repainting costs. In such cases, it is preferable for both parties to take a practical approach and resolve the matter amicably rather than engage in lengthy disputes, especially since there is no dedicated forum for adjudicating minor tenancy-related disagreements,” said Bhavesh Shah, a real estate consultant based in Mumbai.

Another real estate adviser stated that landlords do not always notice property damage during the rental and may only bring it to their attention when the security deposit is paid.

“Many landlords opt not to address small damage because they may live out of town, do not have physical control of the property, and are worried about keeping a positive relationship with the renter. Practical landlords are typically more concerned with ensuring that the tenant vacates the unit on schedule and gives over possession at the end of the rental term. However, each situation is unique and must be evaluated on a case-by-case basis,” said Mahendra Salvi, a real estate agent in Mumbai’s western suburbs.

A record 5.4 lakh housing units are expected to be completed in India’s top seven cities in 2026, making it the greatest year for residential deliveries in a decade. However, if the US-Iran war continues, this extraordinary pipeline may face headwinds, with rising energy costs, supply-chain interruptions, and higher construction input prices creating execution bottlenecks and increasing the likelihood of project delivery delays, according to an Anarock assessment.

It stated that the western markets of MMR and Pune alone account for 57% of the homes scheduled for completion, with a substantial part consisting of projects started between 2021 and 2023 that are now in the final phases of construction.

A prolonged geopolitical crisis has the potential to raise energy and freight costs, disrupt supply chains, and inflate the prices of critical construction materials such as steel, aluminum, copper, electrical equipment, and building systems. According to the report, these cost constraints may have an impact on project feasibility, reduce developer profits, and complicate execution schedules.

With construction activity rising as numerous projects near completion, developers are especially vulnerable to supply-chain interruptions and input-cost instability. While the present completion pipeline is generally on pace, a lengthy disagreement might create execution bottlenecks and increase the likelihood of project delays, it warned.

According to the analysis, a prolonged Middle East war is projected to put house delivery deadlines to the test in 2026, with disrupted supply chains and escalating costs. In the pandemic-hit year of 2020, as many as 2.14 lakh homes (46% share) were delivered against a planned pipeline of 4.66 lakh units, demonstrating the impact of substantial disruptions, according to the research.

Will MMR, Pune, and Bangalore be struck the hardest?

According to the analysis, Mumbai, Pune, and Bengaluru account for 70% of homes scheduled to be completed by 2026 and may encounter the most significant execution issues. NCR, a prominent real estate company, plans to complete only 39,000 housing units this year.

According to the estimate, nearly 5.19 lakh units were delivered in the top seven cities in 2025.

“According to the most recent ANAROCK Research statistics, a record 5,40,400 housing units are slated to be completed across the top seven cities in 2026, the biggest number in the last decade. According to Prashant Thakur, Executive Director and Head of Research and Advisory at ANAROCK Group, the western markets of MMR and Pune account for 57% of all scheduled deliveries this year.

Worst crisis since Covid?

“Historically, ambitious home supply pipelines have frequently been vulnerable to external shocks such as these. For example, ANAROCK Research indicates that roughly 4.66 lakh residences were expected for completion in the top seven cities during the epidemic year of 2020. However, only roughly 2.14 lakh units, or 46% of the intended pipeline, were eventually delivered, as building came to a standstill owing to lockdowns, labor migration, and supply-chain disruptions.”

According to the paper, the disparity between anticipated and actual completions demonstrates that even projects in advanced phases of construction can experience delays when faced with large-scale disturbances. Unlike during the pandemic, construction activity and labor availability are constant.However, a prolonged geopolitical conflict will definitely have an influence on project economics, resulting in higher energy prices, increased logistics costs, and inflation in critical construction materials including steel, aluminum, copper, electrical equipment, and building systems, according to the paper.

2021-23 house launches are nearing completion, establishing a record delivery pipeline; focus on execution.

Between 2017 and 2025, Anarock Research estimates that about 30.5 lakh housing units were delivered in India’s top seven cities. With nearly 5.40 lakh units scheduled for delivery this year, 2026 will be the largest delivery year in the past decade, if all deliveries are completed on time. Residential projects built between 2021 and 2023 are currently nearing the final stages of construction, resulting in an exceptional completion pipeline throughout the country’s top housing markets. The current West Asia war has put this pipeline under actual threat of derailment,” according to the report.

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has supported a developer’s ability to collect cancellation fees from a homebuyer’s booking cash, even if the buyer cancelled within two days due to financial constraints and uncertainties about house loan approval.

MahaRERA dismissed the buyer’s request for a complete refund, ruling that the deduction was lawful because it was made in accordance with the project’s cancellation policy, which was posted on the MahaRERA website via a deviation report provided by the developer.

The case

A customer reserved a 2 BHK flat in May 2024 for ₹89.86 lakh. The homebuyer paid a booking fee of ₹1 lakh and received an allotment letter the same day. However, two days later, and before any sales agreement was signed, the homebuyer cancelled the booking.

The homebuyer stated in an email dated May 10, 2024, that he had to cancel the appointment owing to financial difficulties and doubts about loan clearance. The homebuyer complained to MahaRERA that the developer deducted Rs. 89,861 as cancellation charges and did not refund the full booking amount, despite the fact that the cancellation clauses in the allotment letter were unfair and violated MahaRERA guidelines and formats. He stated that, despite the developer’s assurance that the refund would be completed within 35 to 40 working days, no refund has been received to date, despite repeated follow-ups and conversations demanding refund and clarification on the deduction,” the homebuyer submitted in the MahaRERA.

Developer’s Argument

The developer, however, insisted that the cancellation was voluntary and caused by the homebuyer’s own financial constraints. It maintained that the booking form and allotment letter clearly stated that cancellation within 15 days of allotment would result in charges equal to 1% of the unit cost. The company deducted ₹89,861 from the booking amount and refunded the remaining ₹10,139. The developer stated that the complainant was informed of the cancellation policy and charges in the booking form and allotment letter, which they accepted.

What is MahaRERA’s return policy for cancellation?

In 2022, MahaRERA issued an order that allowed developers to deduct up to 2% of the total consideration cost in the event of a booking cancellation. However, it also permitted developers to file deviation reports to the MahaRERA website to reveal any changes in project terms or conditions, allowing consumers to make more informed judgments before making a purchase.

In this regard, the MahaRERA order states, “If promoters choose to execute with an allottee an allotment letter that is not in accordance with the proforma of the allotment letter as approved by the Authority in its meeting held on 24.06.2022, then the deviations/modifications in the proforma of the allotment letter as proposed by promoters shall be highlighted in different colour.”

When seeking registration of a real estate project, the developer must upload the same, along with a deviation document outlining the deviations/modifications, so that allottees can make an informed decision, according to MahaRERA’s ruling.

MahaRERA’s order in this instance

While investigating the disagreement, MahaRERA discovered that the developer had published a deviation report in the aforementioned case, which revealed the cancelation policy on the project page. The authority referred to MahaRERA Order No. 35 of August 12, 2022, which permits developers to deviate from the model allotment letter provided that such deviations are disclosed through a deviation report uploaded on the regulator’s website. The respondent uploaded a deviation report dated 21.03.2023 on the MahaRERA website, disclosing that cancellation within 15 days of allotment would attract d.

According to the MahaRERA judgment, the complainant rented the mentioned flat after the deviation report dated 21.03.2023, which had already been placed on the MahaRERA website. As a result, the complainant was found to be aware of the aforementioned cancellation policy at the time of booking.

The MahaRERA dismissed the complaint, stating that it is of the considered opinion that the cancellation charges levied by the respondent were in accordance with the cancellation policy disclosed in the deviation report dated 21.03.2023, and thus cannot be considered illegal or contrary to MahaRERA order no. 25 of 2022.

What do legal experts say?

According to legal experts, homebuyers should carefully analyze the deviation report posted by the developer to the MahaRERA website before making a purchase. Any doubt created by the stated variations may impact the buyer’s decision and, in some situations, result in the cancellation of the booking.

“In my opinion, the current order may cause some doubt among homebuyers. However, potential buyers should exercise extreme caution and study the deviation report filed by the promoter on the MahaRERA website when booking a flat. “If the booking is made after the deviation report has been uploaded, it could be argued that the homebuyer was aware of the cancellation policy and other disclosed deviations at the time of booking,” said Mumbai-based solicitor Trupti Daphtary.