Navigating the challenges of dealing with Indian landlords

Rohit Kumar, Jt. managing director of IKAN Relocation Services India, looks at some of the different types of landlord that expatriates might come across when renting in India. 

Navigating the pitfalls of dealing with Indian landlords
When asked what is the biggest challenge faced by a Western expatriate working in India, aside from culture, I believe it is dealing with and managing landlords.I am sure that managing difficult landlords must be a global phenomenon, but in India, it is magnified many times over. While living in India can be an exhilarating experience for any expatriate family, managing the day-to-day issues of their tenancy and dealing with their landlord is never easy and can take away some of the vibrancy of the experience. In India, being as diverse as it is, there is no single technique and each situation will be different. Through my experiences and while playing advocate through a multitude of tenancy issues over the past 20 years, I am pleased to share some tips for future expatriates coming to live and work in India on dealing with Indian landlords.

Diversity of landlords

Like anywhere else in the world, Indian landlords come in all different shapes and sizes. While a potential tenant may meet a highly liberal, educated and cultured landlord who will give them space and privacy, there is also the possibility of netting a landlord who is irritatingly inquisitive and interfering or imposes restrictions about cooking meat or entertaining the opposite sex. Many of the landlords can also be tough negotiators when it comes to finalising the lease or agreeing on the rent. Then, there is the landlord who will want to build a close relationship with their tenant and, in turn, may give in to most tenant requests out of a feeling of magnanimity.The expatriate would be well advised to quickly recognise the 'landlord type' they are dealing with, so as to deploy the appropriate strategy to get the best out of the negotiations.

The curious one

Sometimes negotiating with a prospective landlord may resemble an inquisition. Most Indians are curious and landlords feel it their right to know everything about their new tenant. Do not be surprised when some very personal questions are posed and try not to take offence. Expect questions about your salary, if you are or were ever married and your education background. Names will likely be dropped and you may be asked if you knew a 'so-and-so' in your home country. These questions are not meant to irritate, but are born out of sheer eagerness, respect and inquisitiveness. I remember one landlord asking a German expat a few pointed questions about their history and politics, and the German gentleman was extremely unhappy about the line of discussion, finally storming out of the meeting. Politeness declining to answer is an option when side-stepping such questions, as well as deftly changing topics. Most Indians tend to make close relationships very quickly and seeking a personal favour early into the relationship is a high possibility. An example of this is a landlord asking the expatriate tenant for favours of employment for some of his relatives. Sometimes landlords live in the same block as the tenanted property and tend to 'call in' on their 'tenant friends' frequently. In these situations, keeping in good terms with the landlord can be very helpful, as tenancy issues are quickly rectified with their help.
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The biased one

Expats from certain Western countries find themselves to be more welcome than those from other countries. Many restrictions or prohibitions are relaxed for Western expats, while many landlords are reluctant to rent to other tenants. Sometimes religious bias plays a role as well, e.g. a Hindu landlord not willing to rent to a Muslim tenant. 

The tough negotiator

Indians are tough negotiators, sometimes beyond the realms of 'win-win'. Expatriates are warned that many landlords list their properties with multiple brokers and at multiple price points, usually higher than what they may finally agree to close at. This can lead to much confusion, as different sources end up quoting a different rent. The landlords also tend to negotiate with multiple parties simultaneously, playing one offer against another to see who can give them the best rent. The Indian real estate market is complex and highly unorganised, so it is advised to work through a validated broker to ensure smooth negotiations and coverage of all possible points of negotiation. This will also help to ensure the coverage of paperwork and coordination. 

The relationship builder

While many landlords are looking to get the highest rent they can, others may be wealthy business owners, entrepreneurs or even senior government officials. These people value respect and a good landlord-tenant relationship is more important to them than the actual final rent or commercial terms. I have come across landlords who will agree to more favourable terms or smaller deposits when they have a strong mutually respectful relationship with their tenant. 

The real decision-makers

Many times, we have come across landlords who, after conducting a detailed negotiation, refuse to make a decision and usually will end the meeting by stating that they will come back after discussing with their “family”, “father”, “mother” or even “husband” or “wife”.
There are possibly two things happening here: either the landlord is buying time while he negotiates in parallel with another prospect, or this may be a joint decision where multiple family members need to be consulted. In such situations, do expect delays and that you may not get the property. In this case, it is best advised to start negotiating with an alternate landlord immediately. In fact, it is always recommended to approach a negotiation with an Indian landlord with a second option, as this gives you a stronger negotiation position and allows a tougher stand.

The charming one

Polite, welcoming and hospitable behaviour is common in India. I recall a female American expat once closed a property in a lovely neighbourhood and the landlady stayed in the same building. The landlady was extremely charming and friendly; she opened up her home and even suggested that the tenant was welcome anytime to drop in for a cup of tea and to borrow anything she needed. The American took this at face value and looked in on the landlady frequently, even borrowing kitchen utensils etc. She soon realised a change in the landlady's behaviour, as she started to put distance between them. Later, the American expat realised (probably after a cultural briefing) that just because an Indian landlady opened up her house did not mean that the American had to take it literally and accept the offer at face value. Landlords tend to be friendly and helpful as part of the culture, but this offer has to be taken with a pinch of salt.

A final word of caution

Irrespective of the nature and type of landlord, the expatriate must remember that there are certain established market practices and all negotiations would finally happen within these. There are some important points of caution to note while negotiating with landlords in India and while finalising a lease:
  • Lease: keep it simple. If entering into a personal lease, it is recommended that the lease draft be kept as simple as possible for better understanding and comprehension.
  • Terms: most lease terms would be expected to be balanced and should be in equal favour of both the landlord and the tenant.
  • Length of lease: most landlords are reluctant to sign a lease for less than one year.
  • Notice: one months’ notice from either side to terminate the lease is standard practice.
  • Diplomatic clause: landlords expect a minimum commitment towards the rental period. The expectation is usually one year, but this can be negotiated down to six months and sometimes to none.
  • Refundable security deposit: in most markets in India, the security deposit is usually equal to three months' rent. In some markets, like Chennai and Bengaluru, the deposits can be as high as ten months' rent.
  • Rent: the rent is usually paid every month, in advance for that month and by the 7th of the month. In a few cases, rents may also be paid quarterly, six-monthly or even annually.
  • Deposit refund: ensure that the deposit clause protects the deposit and that it is refunded simultaneously with the return of the property.
  • Lease registration: if the lease is secured for a period greater than 11 months, then it needs to be registered and stamp duty must be paid. The usual practice is for both sides split the stamp duty and incurred registration expenses equally.
  • Maintenance of the property: most landlords expect the property returned to them in the same condition, with normal wear and tear exempt. The usual terms are that the tenant is responsible for maintaining the property and will deal with all minor day-to-day plumbing and electrical issues. The landlord is only responsible for resolving any major tenancy-related issues, such as seepage, burst pipes, electrical outages and meter malfunction, and structural damage etc. It is important to note that in the case of a brand-new property that has never been lived in, tenants would generally find teething issues and may be left to fend for themselves with little or no support from the landlord after the property has been handed over.
An employee mobility management company, IKAN Relocation Services India was established in 1996 and is also the founding partner of RELOC8 Asia Pacific Group, a regional network of quality relocation and immigration service providers. IKAN offers end-to-end mobility solutions for Indian and multinational companies on a global, regional and local basis, aimed at supporting the logistics of a global workforce. For more information, visit: www.ikan.com

For more articles on India, visit our dedicated India section.


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