Ever since rent control was abolished in Malaysia, landlords and potential tenants have been free to negotiate the rental amount.
While there are no specific laws governing and regulating the responsibilities and duties of the landlord and tenant, the basic guidelines for renting a property in Malaysia still applies.
Having an estate agent well versed in the legal proceedings will be useful. The estate agent will also negotiate on your behalf.
1. Earnest deposit: After all negotiations are settled, an ‘Earnest deposit’ will need to be made. This usually amounts to the first month’s rent and serves as a booking fee. Once this deposit has been made, the landlord cannot allow other tenants to view the property or rent it to anyone else.
2. Tenancy agreement: The tenancy agreement must be signed within seven days from the date the ‘Earnest deposit’ is made. The tenant will also pay a ‘Security deposit’ which is usually two months’ rent and a ‘Utility deposit’ which is half a months’ rent. The tenancy agreement will also prevent you from being kicked out of the premises should the landlord sell the property to another party.
3. Diplomatic clause: The tenant, if he is a foreigner living and working in Malaysia indefinitely, must ensure that the tenancy agreement comes with a ‘diplomatic clause’. This clause comes into effect if or when the tenant has to leave the country and requires the contract be terminated early. The tenant will be required to present evidence supporting his reasons for leaving, such as being redeployed to another country for work. The estate agent will be able to assist in ensuring that this clause is stipulated in the agreement. Should this clause be activated, a written notice of two to three months must be given to the landlord.
Once the tenancy agreement has been signed, the estate agent will take it to be stamped by the Malaysia Inland Revenue Authority to validate it. Stamp duty should be paid by the tenant.
As most agreements in Malaysia are for a 12 month lease, it is important for the landlord and the tenant to agree on renewal possibilities once the tenure is up.