Renting a Property in Malaysia

秀气灵人

在此分享有关租产业的一些资讯。 Renting a Property in Malaysia

The following are some useful information on renting a property in Malaysia.        1. FACTORS TO BE CONSIDERED:       (i) location; (ii) neighborhood; (iii) transportation access; and (iv) usage    2. DIFFERENCE BETWEEN LEASE AND TENANCY       If the contract term is below three (3) years, it is called a tenancy. If the contract term is beyond three (3) years, it is called a lease. Legally, leases are registrable with the Land Office and the lessees have a registered interest in the land upon registration. Theinterests of a lessee is better taken care of / protected compared to atenant under a tenancy as they only have an equitable interest on theland i.e. their interests would be subject to those with registeredinterests. However, all tenants/ lessees are entitled tothe quiet enjoyment of the property subject to the terms and conditionsof the governing written document. Under the common lawjurisdiction of Malaysia, the right of quiet enjoyment and the actualpossession of the tenants/ lessees are highly protected.    3. DOCUMENTATION AND PROCEDURES       Thereare no fixed rules on the form of agreement for tenancy. However, it iscommon practice that upon signing of the tenancy, two (2) months’rental is paid as deposit, one (1) month rental is paid advanced and autility deposit that is normally fixed at one (1) month rental subjectto the parties’ agreement. A lease can be registeredwith the relevant land authority by submitting a duly completed Form15A prescribed under the National Land Code of Malaysia.    4.    STAMPING FEE       Alltenancy/lease agreements are required to be stamped as failure to do sowould render the agreement inadmissible in court in the event a disputearises. The stamping fee calculation is based on theamount of monthly rental payable and also the tenancy period. Theformula below set out in the Stamp Act 1949 is used to calculate therequired stamping fee on the original document.          When lease/tenancy is for a period     Without fine or premium when average rent     other considerations calculated for a whole year     Not Exceeding 1 Yr     Exceeding 1 Yr    But Not Exceeding 3 Yrs     Exceeding 3 Yrs     (i) Does not exceed RM2,400 Nil Nil     Nil     (ii) For every RM250 or part     In excess of RM2,400     1.00     2.00 4.00              For example: If a property is rented out for RM800 a month for a 2 year period:         The yearly rental shall be RM9,600.     The stamp duty shall be: (RM9,600 – RM2,400) / RM250 = RM29 X 2 years = RM58 (for the original copy)        5.    LEGAL FEES    The legal fees for drawing up a tenancy/ lease agreement would dependon the amount of rent payable monthly. The Solicitors’ RemunerationOrder 2005 has set out the formula below to calculate the legal fees.         Tenancy:    Montly Rent    Fees    For the first RM10,000    25% of the monthly rent    For the first RM90,000    10% of the monthly rent    Where rent is in excess of RM100,000    Negotiable on the excess (but shall not exceed 10% of such excess)    Lease:    Montly Rent    Fees    For the first RM10,000    50% of the monthly rent    For the first RM90,000    20% of the monthly rent    Where rent is in excess of RM100,000    Negotiable on the excess (but shall not exceed 20% of such excess)        6.    FAILURE TO PAY RENT Enforcementof the terms in the tenancy agreement can be done by formally demandingfor the arrears and stating that failure to comply with the demand willresult in commencement of a legal action (writ of distress action ornotice of forfeiture to terminate the tenancy). Before anaction of forfeiture can be taken, the Landlord/ Lessor must firstissue a notice in writing specifying the particular breach, entailingthe tenant to remedy the breach and make compensation (if required).Forfeiture would terminate the tenancy. A writ of distressaction is taken out without the involvement/knowledge of the tenant (exparte). It does not terminate the tenancy but allows the landlord toseize and auction off the tenant’s/ lessee’s property (except personalbelongings such as clothes and tools of trade) to recover the arrears. Itmust be noted however that as a writ of distress does not terminate thetenancy, there is a risk that the tenant/ lessee may fail to pay rentagain resulting in the need for another writ of distress action.Further, should the tenant contest the action, it would be a lengthyand costly process.