DISCOVER OURAreas of practice

Because of the firm’s experience as a commercial litigation firm for business organisations, we have a knack for advising corporate clients to pre-empt problems and disputes.

Landlord & Tenant

Landlord and Tenant covers the area of law governing the relationship, rights and duties between landlord and tenant. It includes elements of Real Property Law and Contract Law.

Issues Relevant to a Landlord

The main concerns a landlord will have are usually as follows:

  1. Can the landlord collect the rental
  2. How and what are the consequences if it is necessary to evict the tenant
  3. Renewal of tenancy agreement
  4. Will the tenant cause damage to the property

These concerns should be accounted for in a properly prepared and drafted tenancy agreement. The tenancy agreement will normally provide clauses for treatment of deposits in case of non-payment of rental or damage to the property. It also should have clauses to cater for reinstating the condition of the property subject to normal wear and tear of the property.

A properly drafted tenancy agreement will also cater for the term of years or months of the tenancy and the rental. It will also provide for a landlord to claim rental for the full tenancy term.

In respect of eviction of the tenant, please see below the information on eviction. In Malaysia, a tenancy’s duration of 3 years and below need not be registered. A longer duration would require a lease to be created and registered pursuant to the National Land Code 1965 (Section 221(2)). It is common in Malaysia for tenancy agreements to have a duration no longer than 3 years and have renewal clauses to cater for additional terms beyond the initial 3-year period.

Firstly, a landlord must properly determine the tenancy agreement on valid grounds. Should the tenant after termination not leave and overstay the landlord will have to apply to the court for an eviction order. The relief also applies to situations where the tenancy has come to an end and the tenant refuses to move out. Such application is made pursuant to Section 7 of the Specific Relief Act 1950 and Order 45 Rule 3 of the Rules of Court 2012 for a writ of possession.

For enquiries relating to eviction, kindly contact Mr Alfred Lai (alfredlai@gtrz.com.my), Ms Teo Qing Qing (qing@gtrz.com.my) and/or Ms Khong Jo Ee (joee@gtrz.com.my).

The landlord is entitled to double the rental if the tenant overstays, pursuant to Section 28(4)(a) of the Civil Law Act 1956.

For non-payment of rental, a landlord has remedies under the Distress Act 1951 and Order 75 of the Rules of Court 2012. The Distress Act 1951 allows a landlord to obtain a writ of distress for the Court bailiff to seize property of the tenant in the premises for auction to satisfy the unpaid rental. This remedy is most effective against retail shops or outlets which have saleable goods.

Issues Relevant to a Tenant

The main concerns a tenant will have are usually as follows:

  1. Privacy, in legal terms the right to quiet enjoyment of the premises
  2. The liability relating to rental
  3. Wrongful termination of the tenancy
  4. Liability to maintain the condition of the premises

One of the key aspects in the right of a tenant is that for rent paid the tenant is entitled to quiet enjoyment of the premises. The landlord is generally not entitled to enter into the premises and interfere with the proper use by the tenant. In short, a tenant is entitled to privacy. Well-drafted tenancy agreements will contain clauses which protect this right and limit the situations of when a landlord may enter the premises.

Most tenancy agreements are drafted as a fixed-term tenancy. That means the tenant agrees to rent the premises for a specified duration. It is common for the duration to be one to three years. A tenant will be liable for the rental of the entire remaining term should the tenant vacate the premises. This normally forms the biggest liability to the tenant should the tenant decide to leave and terminate the tenancy earlier.

On the other hand, a landlord having agreed to a fixed term tenancy cannot without good reason or a breach by the tenant of the tenancy agreement terminate and evict the tenant. So long as the tenant fulfils the tenant’s obligations under the tenancy, the tenant is entitled to stay and quietly enjoy the premises. For information relating to wrongful termination of a tenancy, kindly contact Ms Irene Wong (irene@gtrz.com.my), Ms Teo Qing Qing (qing@gtrz.com.my) and/or Ms Khong Jo Ee (joee@gtrz.com.my).

Most tenancy agreements have clauses for maintaining the condition of the premises. Of course this is subject to the usual course of wear and tear. Difficulty arises when arguments arise between landlords and tenants as to what constitutes the usual course of wear and tear. Tenants may find that the landlords will forfeit deposits they have paid if the condition of the premises is not maintained by the tenant. It is common in a tenancy agreement for commercial property to require the tenant to restore the premises to its original condition. This is because tenants for commercial property would have renovated the premises to suit their businesses.

Other Considerations Relating to Landlord and Tenant

It is prudent for both landlord and tenant to regulate their relationship through a properly drafted tenancy agreement. For further information on tenancy agreements, kindly contact Ms Ma Pin Yen (pinyen@gtrz.com.my) and/or Ms Lee Fong Ling (fongling@gtrz.com.my).

  1. Relevant information of the parties (i.e. landlord and tenant)
  2. Description and location of the premises
  3. The monthly rental
  4. Tenure or duration of the tenancy
  5. Commencement date of the tenancy
  6. What deposits are required to be paid. It is common in Malaysia to require a security deposit and utilities deposit
  7. Business in or purpose of use of the demised premises

The lawyers will also ask and discuss other issues such as renovation, services provided, termination, renewal of tenure and reinstating the condition of the premises.

Monthly Rental Scale Fees
The first RM1 – RM10,000 25% of the monthly rental
The next RM10,001- RM100,000 10% of the monthly rental
Above RM100,000 Discretionary but not more than 10% of the monthly rental

It is advisable for both landlord and tenant to appoint their own lawyers to represent their interests and commonly each party shall bear such party’s own legal fees and disbursements.

Stamp duty is also payable on a tenancy agreement.

Click here to calculate fees for a tenancy agreement.