When it comes to Tenancy Agreement (TA), often people are reluctant to engage a lawyer. The assumption is always that I can simply google standard form or template of a Tenancy Agreement, make a few amendments here and there and use it as my TA. Well, dear TENANT, we understand that idea of saving a few bucks is always appealing and interesting. We totally get that! However, here are some of our suggestions on the DO’s and DON’T’s that should be considered before one enters into a TA!
These are some real important factors which you MUST consider before agreeing to any TA:–
- Who is your landlord?:-
You need to make sure that the person claiming to be the landlord is actually THE LANDLORD himself or the representative that is acting for landlord is LEGIT. If a person claims that he is administering the premise on behalf of someone else, please do not hesitate to check his credentials! We have had cases where tenants asking for our advice as the actual landlords are threatening legal actions against them on the basis that they have been occupying the premises illegally.
Also, if you are subletting from someone, please make sure that the landlord is well aware of the sublet situation between you and his tenant.
- How much are you actually paying per month?:-
Some rentals would cover utilities payment (eg: building maintenance, sewerage charge) and some other rentals on the other hand may not cover such payments. It is crucial for every tenant to check with the landlord what falls within the landlord’s obligations in term of maintenance billings (Indah water, Building management, quit rent, assessment fee etc). It is important to also avoid any possibility of the premise being served with Notis Sita in the circumstances where the landlord fails to pay the quit rent or assessment bill (“cukai pintu/cukai tanah”).
- Are you allowed to sublet?
As we don’t have specific law governing tenancy in Malaysia, subletting then falls within the landlord’s discretion. You would need to check with your landlord whether you can sublet the premise or otherwise. If the landlord has no objection to the idea of subletting, please get his written consent.
- Does your landlord allows for early termination?:-
We cannot really foresee what will eventually happen in the future. Sometimes, we have to go through changes which would require you to move to another city or country.
A wise landlord will plan for such possibilities by providing an early termination clause in the TA. However, such early termination clause would usually require some compensation to be paid to the landlord. In some circumstances, the security deposits paid to the landlord will be forfeited. Nonetheless, please be advised that there are also landlords who would require the tenants to make full payment of rentals for the remaining tenancy period for any early termination of TA by the tenant.
- Can your Landlord terminate the TA before the expiration of the rental term?:-
Well, either party would have the choice to terminate the tenancy before the end of the rental term. However, you need to ensure that you will be adequately compensated if the landlord chooses to terminate the tenancy before the end of the rental term.
- What happen to your security deposits?:-
The security deposits paid by the tenant is an additional payment made to the landlord to cover any damages caused by the tenant and/or for any failure by the tenant in making rental payment within the requisite period. It may also be utilised by the landord to pay any outstanding utilities should the tenant fails to do so.
Your security deposits will be refunded to you at the end of your rental term. However, if the tenant is found to have caused any damages to the premise, the landlord is at the liberty to utilise this fund to cover any rectification costs. So, please avoid from causing any damage to the premise!
- How much do you need to pay lawyer for a TA?:-
Lawyers are bound by the Solicitors’ Remuneration Order 2005 (SRO) for the preparing, drafting and reviewing of tenancy agreement. The Schedule provided below would be able to assist you in estimating the relevant costs:
Second Schedule of the SRO provides as follows:-
However, please be advised that the above fee is not inclusive of the costs of disbursements (stamp duty, printing charges etc). (*Lawyers do need to pay for electricity and paper too* 😊)
- Do you need to stamp the TA?:-
Any agreement is valid even if it is not stamped. However, one should be reminded any unstamped documents would carry less weight in court! In other word, it would be less meaningful! As such, we definitely do not want such circumstances to happen and it is also BETTER TO BE SAFE THAN SORRY! Therefore, please go to the nearest Malaysia Inland Revenue Board (IRB) or better known as Lembaga Hasil Dalam Negeri (LHDN) to get your TA stamped by IRB/LHDN.
The stamp duty fees for a TA is calculated using the following formula as per the Stamp Duty Act 1949: –
Monthly rental is RM1000.00 for a period of 2 years and the agreement is to be prepared in 2 copies.
9. Do you need to keep a copy of the TA?:-
YES, you should! Whenever you sign any agreement, please make sure to request a copy of the agreement which has been duly stamped. By doing so, you are one step ahead in ensuring that you are well equipped whenever any disputes arise with regards to the TA. The agreement can also be treated as a guideline for both parties.
- Is it worthwhile to appoint lawyer for TA?:-
The answer really lies on YOU.
There we go! We hope you now have a better and general understanding on tenancy and the relevant implications within the matter. You have any other concern? Well, you know where to find us!
Nur ‘Afifah Adzhan 😊