A Bengaluru tenant’s ordeal has sparked a debate over fairness and legal clarity in the city’s rental market after he lost a significant portion of his security deposit, along with the token amount, within hours of paying it, after he lost his job the same day, which compelled him to back out of the deal as he could no longer afford the apartment.
In a post shared on Reddit, the tenant detailed how he had finalised a flat in BTM Layout and paid a ₹5,000 token amount on April 8 to block the unit. “Fast forward to April 24, the owner hits me up saying, ‘pay the deposit now,’ and I paid ₹78K. And boom… same day, literally 2–3 hours later, I get laid off,” he wrote.
The tenant said the sudden job loss forced him to reconsider the rental. “At that point, I knew I couldn’t afford this place anymore… So I asked the owner to return the deposit.”
“However, the landlord allegedly deducted multiple charges. “This guy straight up deducted: 1 month rent, token amount, agreement charges (?? like what agreement, nothing was signed 😭), and returned only part of the money,” the tenant wrote.
Redditors say that in Bengaluru, token advances and security deposits are often exchanged before formal agreements are signed. In the absence of clearly defined cancellation terms, disputes over refunds and deductions are common, with landlords citing potential vacancy losses while tenants question the legality of such charges.
Deposits, deductions and ‘opportunity cost’
Several Redditors suggested practical workarounds. “One friend of mine is doing the same in Mumbai. Renting 1 room of a 3BHK as Airbnb. Or he can find an immediate replacement,” one comment read.
Others framed the landlord’s actions through a financial lens. “Speak to the owner in person and explain. Things work out better in person. Also, you have to look at the opportunity cost for him as well… Having deducted a month’s amount is just to cover up for his loss,” another user noted, suggesting that landlords may justify such deductions if they have turned away other prospective tenants.
However, several Redditors questioned the legality of the deductions, particularly in the absence of a signed agreement. “Taking it to the Police is the best option… you’re in the right, legally too. This is a loophole that most owners resort to, almost always!” one user claimed.
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What is token money, and why is it paid?
Vittal B R, an advocate at the , said ‘token money’ does not have a defined legal status in rental transactions. Instead, it has emerged as a market-driven practice, particularly in tight housing conditions where demand outstrips supply.
“In many cases, a landlord may have already shown the property to several prospective tenants. To ensure the property is not rented to someone else, a tenant may pay a token advance requesting the landlord to hold the house until the agreed move-in date,” he said.
What should tenants keep in mind while paying a token amount and a security deposit?
Legal experts caution that tenants should exercise due diligence before paying any token advance or security deposit, as these may be forfeited if an agreement is not signed.
According to advocate Akash Bantia, even the Model Tenancy Act 2021 does not specifically regulate token money. The Act, introduced as a central framework to bring uniformity to India’s rental market, focuses on formalising , balancing landlord–tenant rights, and encouraging the use of written contracts for both residential and commercial properties.
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(Disclaimer: This report is based on user-generated content from social media. HT.com has not independently verified the claims and does not endorse them.)