What are zero-rental flats?

Mar , 2
What are zero-rental flats?

In Mumbai, the concept of zero rental flats is becoming increasingly popular. 


For more than a decade, this concept has been slowly gaining popularity. Here the tenant wouldn’t have to pay any rentals monthly. Instead, the tenant has to deposit a huge amount at the beginning. For example, in Mumbai, the rents of residential flats range from Rs.15,000 to Rs.20,000. So if it is Rs.20,000 then the tenant needs to pay 100 times more than this amount, i.e.Rs.20 Lac when the agreement starts. The tenant won’t have to pay rentals per month. Plus when the agreement ends, the owner has to return the whole amount to the tenant. In case of any damage, the owner will deduct that amount from the principal sum. The amount of the lump sum deposit is decided based on the current rental rate of the location.

Before the zero rental flats scheme, the zero deposit scheme started and is still there. Previously for any rental, the tenants needed to give a deposit amount along with the rent per month. This deposit acts as the safety caution money for the owner. The zero deposit scheme guarantees no deposits to the owners instead the owner will be protected by insurance cover to the value of six weeks’ rent under normal cash deposit agreement and is non-refundable.

Many millennials with transferable jobs are looking out for zero rental residential flats. People searching for rental housing in Mumbai and suburbs are opting for zero rental schemes and mostly are millennials. 


With this new scheme in trend, tenants and owners, both can be benefitted. 

  • Owners are encouraging zero rentals for heavy deposits so that they get back their flats in proper condition when the tenants leave. 
  • A well planned leave-and-license agreement is drawn up for which both the tenant and the owner wouldn’t have to contact each other until the agreement ends. 
  • The tenants are taking good care of the flats in order to avoid any deductions when they will get the money back. 
  • Owners are finding this lucrative as they can reinvest the lump sum deposit on various return schemes. They can invest in a new plot or an apartment. 
  • Tenants get a chance of saving money on their monthly rents, especially in cities like Mumbai, where rents are so high. 
  • The owner can skip the nuisance of paying utility bills, such as power and water bills, especially in the very last month of the agreement. 
  • It is easy to prolong the tenancy duration in large deposit flats. 


  • The tenant needs to shell out a huge amount of money as the deposit at the very beginning of the agreement and that can lead to a financial strain especially in the pandemic when companies are cutting down salaries and manpower. 

How do you feel about the new zero-rental flat system as a tenant? 

If you have to rent your apartment, will you opt for this scheme?

Share your views in the comments.

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