With no current legislation covering rental agreements in Malaysia, any disputes between landlord and tenant can get quite tricky! No doubt, renting out your property is not as simple as purely sitting at home waiting for the rental income to be generated to you each month.
As a landlord, there are certain rights and obligations that come with the role, such as property upkeep, listing costs, agent fees, etc. This article will serve as a basic guide as to what rights and obligations you have as a landlord in Malaysia.
The relevant laws that are related to tenancy
According to the National Land Code, a tenancy is ‘any tenancy or sub-tenancy for a term not exceeding three years’ that does not require registration. A rental agreement that exceeds three years will be considered as a ‘lease’ that requires registration.
Although there is no regulatory framework for tenancy agreements, the following laws do have a provision to solve any disputes related to tenancy. Common Law or Case Law in this case is the overarching framework which covers general rental disputes.
- Contracts Act 1950 – covers tenancy agreement conflicts.
- Civil Law Act 1956 – covers disputes regarding rental payments.
- Distress Act 1951 – covers matters of eviction.
- Specific Relief Act 1950 – states that landlords are prohibited from evicting the tenant or changing the locks etc., without a court order.
More about the differences of ‘lease vs tenancy’, here.
A landlord’s rights and obligations
Usually the duties and obligations of both landlord and tenant are outlined clearly in the tenancy agreement.
A landlord’s duties usually includes:
- Paying the fees and charges related to the property, such as cukai tanah, cukai taksiran, maintenance fees, etc.
- Maintaining the fire insurance for the property, as well as the major infrastructures such as piping, electrical wiring etc.
- The landlord cannot use his/her set of keys to enter the unit without the tenant’s permission. The landlord also doesn’t have the right to demand that the tenant allow him/her in without valid reason.
However, there are some ‘unspoken rules’ as a landlord as well. These include common sense practices such as respecting your tenant’s privacy, encouraging two-way communication and being prompt in responding to your tenant, especially during emergency.
You need to have a well-written tenancy agreement
In No. 2, we mentioned that the duties and obligations for both landlord and tenant should be clearly outlined in a tenancy agreement? So what is a tenancy agreement?
It is a legal covenant between the landlord and the tenant that provides a detailed description of the rented property, the tenancy duration, rental payment amount and schedule, any furniture, fixture and other amenities involved.
A tenancy agreement can be drafted by a professional lawyer. However, hiring lawyers can be expensive, so some landlords opt to draft the agreement on their own to be agreed by the tenant.
What to include in a tenancy agreement?
A tenancy agreement is put in place to protect both the landlord and tenant, thus every statement needs to be clearly worded and cover all possible scenarios. What is considered a well-written tenancy agreement?
Basically, a tenancy agreement should include the following:
- Property details, such as type of property, its address, landlord and tenant contact, purpose of tenancy, etc.
- Tenancy duration and renewal clauses.
- Rental and deposit amount, payment schedule and method
- What is provided by the landlord; any furnitures, utilities, homewards etc.
- Landlord responsibilities and duties
- Tenant obligations, do’s and don’ts
- Consequences or penalties for late rental payments
- Terms and conditions on subletting / additional tenants
- Special clauses such as smoking, pets, access to amenities, etc.
What to do if my tenant fails to pay rent on time?
If your tenant does not pay the rent in a timely manner as outlined in the tenancy agreement, you should seek the assistance of a lawyer and first give the tenant a notice to pay. If he / she still fails to make payment, the landlord can serve the tenant a notice of termination and file a lawsuit to obtain a court order.
Under the Special Relief Act 1950, landlords may not evict their tenants without a court order. Thus as a landlord, you would have to follow the proper law processes on serving termination or eviction notice if your tenant regularly fails to pay his / her rent on time.
What to do when disputes happen?
First things first, do not act out on emotion when disputes happen. As much as you would like to resolve any messy situation with your tenant by giving him / her the final ultimatum (ie. termination or eviction); you should first, check the tenancy agreement.
A tenancy agreement falls under the Contracts Act, which assumes that all parties have willingly and mutually agreed to all its terms. If the issue is clearly outlined in the tenancy agreement, then you should resolve it according to the terms in the tenancy agreement that has been previously agreed upon. If it is not covered in the agreement, then you may need further assistance from a lawyer.
Select your tenants wisely!
It goes without saying that as landlords, you would want to avoid any issues with your potential tenant. Thus, before confirming your tenant, you should set your own standards and only select the tenants that match your selection criteria. Additionally, it will be a good idea to check your potential tenant’s background, such as his / her credit history or employment history. Do consider getting references from his / her previous landlords or agents.
Being a landlord is not as easy as it sounds, and involves a lot more effort to make it work, especially when it comes to property and tenant management. Thus, you need to be well-informed of your rights and obligations as a landlord in Malaysia, so that you can further avoid unnecessary conflicts with your tenant.
Refer to the source article for ‘everything you should know about landlord rights and obligations in Malaysia: http://bit.ly/LandlordRightsAndObligations
This article is intended to convey general information only. It does not constitute advice for your specific needs. This article cannot disclose all of the risks and other factors necessary to evaluate a particular situation.
Any interested party should study each situation carefully. You should seek and obtain independent professional advice for your specific needs and situation.