Tenancy Management in Malaysia

By: Admin

Due to rapid development during the last few years in the property sector, more issues related to property management have arisen. At the same time, more investors deal in international real estate. This requires a thorough knowledge of the relevant property laws in the country where properties are leased and sold.

Conflicts between landlords and tenants may arise for a number of reasons. The first way to deal with conflict is to avoid it in the first place by having a clear indication of the responsibilities of each party. If conflict still arises, there are a number of ways to resolve the issue.

Landlord Defined

In property law, the term “landlord” usually denotes a person who legally owns or has a beneficial interest in the property. This term applies to residential properties, as well as to commercial properties.

Tenant Defined

In property law, the term “tenant” usually means the individual who is provided with a tenancy to a particular property. An individual can mean a natural person, corporation or other such entity according to the relevant law.

Tenancy Agreement Defined

A tenancy agreement is a contract between the landlord and the tenant. The tenant agreement provides all of the terms and conditions related to the property. While this is usually a written document, an agreement may be an oral one. However, many countries require that contracts pertaining to land be in writing. If the tenancy is expected to last more than three years, the agreement is usually considered a lease of the property. In Malaysia, this requires the title of the property to be registered in compliance with the National Land Code 1965. A landlord that is in compliance with this law is provided with statutory protections while a landlord who is not may not receive such protections.

Legal Effect of the Standard Tenancy Agreement

Once the landlord and tenant enter into a tenancy agreement, they are bound by its terms and implications. Even if a landlord uses a standard form, he or she should be aware of the tenant’s right to negotiate the terms of the tenancy agreement. The agreement should not be written in such a manner that it is inherently slanted toward one party.

In order to have the most effective tenancy agreement, both parties should be aware of their rights and obligations under the tenancy agreement. While many landlords enter into a written contract, some do not. While it is highly encouraged to have a written contract, s213(2)(a) of the National Land Code 1965 allows verbal agreements to be valid and enforced. For example, agreements can still be enforced when an existing tenancy expires or when rent is being paid despite no written agreement. In these situations, the agreement is considered a month to month tenancy in which the tenancy renews every month unless one of the parties notifies the other of a desire to terminate it.

Termination of Tenancy

The tenancy agreement typically includes a provision regarding how tenancy should be terminated. A tenant must usually provide a notice to vacate while a landlord must usually provide a notice to terminate. The agreement usually specifies how far in advance such notice must be provided.

If the tenant wants to continue to reside in the property beyond the term of the agreement, the landlord and tenant may enter into a renewal or new tenancy agreement. Rent may be adjusted during this time. If the parties do not agree on the terms of a new agreement, the tenancy is terminated.

A common issue occurs when a tenant refuses to vacate the unit even though the lease has terminated. Landlords may attempt self-help remedies, such as cutting off power or changing the locks, but this conduct is prohibited. Taking such action can give the tenant the right to receive damages from the landlord and to commence an injunction proceeding so that he or she can stay on the property.

Landlord Remedies

If a landlord wants to evict a tenant, his or her sole remedy is to proceed with a court action against the tenant. This action may be taken in order to receive any rents owed, as well as to force the tenant to leave the property. The landlord must properly serve an eviction notice on the tenant during which time the tenant is instructed to hand over the property and any past due rent. After the notice expires, the landlord must attain a court order for eviction. If granted, the landlord can then take steps to seal the property so that the tenant cannot enter the unit. The landlord can also collect double rent on the tenant if he or she still continues to remain on the property during this time.

Source : hg.org