A clean tenant exit in Hyderabad follows the rental agreement: confirm the notice period, run a joint inspection against the move in inventory, deduct only unpaid rent, pending utility or society dues and damage beyond normal wear, then settle the balance by bank transfer with a written, itemised statement both sides sign.
Start with the notice and the agreement
Everything about a tenant exit flows from the rental agreement: the notice period, the lock in, what the deposit covers and how quickly it must be returned. Read it again the day notice arrives. If the agreement is silent on notice, Section 106 of the Transfer of Property Act, 1882 generally applies, which for a month to month residential tenancy means fifteen days' notice.
Acknowledge the notice in writing, confirm the exact vacating date, and agree a time for the joint inspection. If the tenant is leaving during a lock in period, check whether the agreement provides for rent in lieu of notice before you discuss deductions.
Run a joint inspection against the move in record
The single best protection against deposit disputes is a move in inventory with dated photographs, signed by both sides at the start of the tenancy. At move out, walk the property with the tenant and compare room by room.
- Walls, floors, doors, windows and fittings.
- Appliances and furniture listed in the inventory, and whether they work.
- Bathrooms and kitchen: taps, fixtures, drains, geysers, exhaust fans.
- Keys, remotes, access cards, parking stickers.
- Meter readings for electricity, water and gas, photographed.
If you are abroad, have your manager do this on a video call with you, and share the photographs with the tenant the same day. A professional physical verification report is useful evidence if a dispute follows.
What you can fairly deduct
| Usually fair to deduct | Usually not fair to deduct |
|---|---|
| Unpaid rent up to the vacating date | Normal wear and tear, such as faded paint or minor scuffs |
| Final electricity and water bills | Upgrades you choose to make for the next tenant |
| Unpaid society maintenance the tenant agreed to pay | Repairs to items that were already damaged at move in |
| Damage beyond normal wear, supported by photos and quotes | Flat "cleaning" or "painting" charges the agreement does not mention |
| Missing items listed in the signed inventory | Estimated costs without a quote or bill |
Keep each deduction specific and backed by a bill, a quote or a photograph. A vague lump sum invites a dispute; an itemised list usually ends one.
Close out utilities and society dues
- Electricity: record the final reading and settle the bill to the vacating date. If the connection is still in a previous owner's name, this is a good moment to fix it; see our TGSPDCL name change guide.
- Water: check the HMWSSB bill or the society's water charges.
- Society: obtain written confirmation from the association that maintenance, move out charges and any penalties are cleared. Many societies need this before the moving truck is allowed out.
- Internet, gas and other services registered at your address: ask the tenant to show closure or transfer.
Settle the deposit in writing
Prepare a one page settlement statement: deposit received, each deduction with its reason and amount, and the balance payable. Both of you sign it, or the tenant confirms by email. Pay the balance by bank transfer, not cash, so there is a clear record, and pay within the period the agreement sets. Where the agreement is silent, settling promptly once final bills are known is both fair and the best way to avoid a legal notice.
For NRI landlords: a refundable deposit returned to the tenant is not your income. But if you agree to adjust the deposit against the last months' rent, that amount is rent, and TDS under Section 393(2) of the Income-tax Act, 2025 should be accounted for on it. Agree the treatment with your CA before you accept an adjustment. Our guide to the Income-tax Act, 2025 for NRI landlords explains the current references.
If the tenant disputes your deductions
Share the move in and move out photographs, the bills and the agreement clause, and offer to meet halfway on genuinely unclear items. Most disputes end at this stage. If they do not, the next steps are a lawyer's notice and, if necessary, proceedings before the appropriate forum. This is where the difference between a properly drafted, registered rental agreement and a thin template becomes very clear.
Prepare for the next tenant
Use the vacancy to complete repairs noted in the inspection, repaint if needed, and deep clean. Then start tenant search with a fresh inventory, a background check on the new tenant, and an agreement updated for current tax references. Planning ahead keeps the vacancy short, which matters more to your annual yield than a small difference in rent.
Frequently asked questions
How much of the security deposit can a landlord deduct in Hyderabad?
Only what the agreement permits and what you can support: unpaid rent, pending utility or agreed society dues, missing inventory items, and damage beyond normal wear backed by photographs and quotes or bills.
Can a tenant adjust the last months' rent against the deposit?
Only if the agreement allows it or you agree in writing. For NRI landlords, any deposit adjusted against rent is rent for tax purposes, so the TDS treatment should be agreed with your CA first.
How soon must a landlord return the security deposit?
Within the period stated in the rental agreement. If the agreement is silent, settle promptly once final utility and society bills are known, with an itemised statement and payment by bank transfer.
Can I charge the tenant for repainting?
Only if the agreement provides for it, or if walls were damaged beyond normal wear. Routine repainting after a long tenancy is generally treated as the owner's cost.
What notice period applies if the agreement does not specify one?
Section 106 of the Transfer of Property Act, 1882 generally applies, which provides fifteen days' notice for a month to month tenancy.
Official sources checked
- India Code: Transfer of Property Act, 1882
- Hyderabad Metropolitan Water Supply and Sewerage Board (HMWSSB)
- TGSPDCL, Southern Power Distribution Company of Telangana
- IGRS Telangana, for registering rental agreements
This guide is general information for property owners and is not legal, tax or financial advice. Rules change, and your facts matter. Confirm your specific situation with a Chartered Accountant or a Telangana advocate before acting.
Hand over tenant exits to us
We run the joint inspection, close out utilities and society dues, and prepare an itemised settlement you can approve from anywhere.