Malaysia Rental Laws: Pro-landlord, Neutral or Pro-tenant?

Malaysian landlord and tenant laws are judged by the Global Property Guide to be Neutral between landlord and tenant. On the one hand, tenants have a reasonable 2-3 months' rent worth of deposit, and rent can be freely agreed; however, if the tenant needs to cancel the contract earlier, the tenant can be liable for the remaining rent until the end of the contract.

Rents: Can landlord and tenant freely agree rents in Malaysia?

With the passage of the Control of Rent (Repeal) Act of 1997, rent control was totally abolished in 2000. Although the law states that rents should be freely negotiated, rent increases can be appealed to courts if the tenant feels it is too much.

Deposits

Tenants usually pay a security deposit of two to three months' gross rental and another ½ month of rent as a utility deposit. Rent is usually paid one month in advance.

What rights do landlords and tenants have in Malaysia, especially as to duration of contract and eviction?

Tenancy agreements usually last for a year. Renewal with a possible rent adjustment must be mutually agreed upon. A notice to vacate must be given to the tenant three months before the expiration of the contract. The landlord has the right to vacant possession of the premises from the tenant without payment of any compensation.

Tenancies are exempt from government registration. But detailed written contracts are encouraged to protect the landlord.

How effective is the Malaysian legal system?

Landlord and tenant issues and distress are handled by the Sessions Courts. The court system is inefficient and is very costly compared to the amount to be recovered.

Even if it seems that landlords do not have a problem in evicting non-paying tenants, recovering unpaid rents is a major problem.

In 1997, a Control of Rent (Repeal) Act was passed, aiming to help landlords recover possession of the property and curb abuses by the tenants. The law has done very little to address both.

Legislation

There is no specific landlord and tenant law in Malaysia. Certain provisions of the National Land Code 1965 contain provisions on leases and tenancies. Tenancy agreements are covered by the Contract Act 1950; eviction of tenants is covered in a couple of sections in the Specific Relief Act. These laws are vague and toothless, usually to the advantage of the tenant.