The Landlord-Tenant Relationship: An Overview of the Law – Mr Lim Wei Jiet


In many developed nations where real estate prices had spiked high, many had turned to renting instead of purchasing real estate. This can be observed in countries like the UK and Germany where property prices are exorbitant to own. This is also true for new startups where renting helps to ease cashflows and provide higher working capital compared to purchasing a property. Besides, renting does appear to have an edge when the economy is poor. While the number of foreclosure cases in Malaysia had been increasing substantially for the previous year 2016 as compared to 2015, the shaky Malaysian economic market is creating more renters. As foreclosures continue and economic conditions become harsh, many Malaysians are scared off of buying altogether. Through renting, many avoided potentially owning a mortgage that is more than the property’s worth, having to commit to paying huge sums of loan repayments every month which furthers limits working capital and cash flows for both business and private owners. With the increase of rental transactions going on, the risks of tenancy disputes are unavoidable.

Property Times took the golden opportunity to interview Mr. Lim Wei Jiet, an advocate & solicitor of the High Court of Malaya currently with a boutique dispute resolution firm based in Kuala Lumpur to provide his expert insights on the Landlord-Tenant relationship through an overview of the Law in the Malaysian context.

The Landlord-Tenant Relationship : An Overview of the Law By Mr Lim Wei Jiet

Landlords and tenants, in a way, are like married couples. Both can’t live without the other, there will be unmatched expectations & the fallout could be a messy affair if not handled properly. As property prices continue to soar and salaries become stagnant, more people will rent for the years to come instead of owning a home. This article explores on important legal aspects to look out for in a landlord-tenant relationship.

Before You Say “I Do” – Scrutinising Terms of the Tenancy Agreement

There is no specific legislation governing tenancy agreements in Malaysia, neither is there a “standard” tenancy agreement required by law. Hence, the tenancy agreement devised by the parties themselves or real estate property agents are crucial in regulating the relationship between the two.

Landlords and tenants, in a way, are like married couples. Both can’t live without the other, there will be unmatched expectations & the fallout could be a messy affair if not handled properly. As property prices continue to soar and salaries become stagnant, more people will rent for the years to come instead of owning a home. This article explores on important legal aspects to look out for in a landlord-tenant relationship.

The following are some important terms (that are non-exhaustive) which should be included in any tenancy agreement:

General Terms:

a) Rental Payment, including the method of payment & the dateline to pay every month
b) Period of the Tenancy
c) Rental and Utility Deposits

Terms to Look Out for if You Are a Landlord:

a) The tenant has to maintain any fixtures or fittings in the premises in good condition
b) Whether the tenant is allowed to make alterations or additions to the premises, and if so, what are the limits and should there be prior consultation with the landlord?
c) The tenant is prohibited to use to use the premises for other purposes e.g.: a residential home used for commercial activity
d) The tenant is prohibited to assign or sub-let the premises
e) The landlord’s right of entry and inspection of the premises (with adequate notice beforehand)
f) At the end of the tenancy, for the tenant deliver vacant possession of the premises in a clean and tenantable condition

Terms to Look Out for if you are a Tenant:

a) The landlord has to maintain structures such as roofing, walls, water piping & electrical wiring
b) The tenant’s right to peaceful enjoyment of the premises without unnecessary interference and nuisance
c) The option for renewal at the end of the tenancy, and if so, whether the tenant has priority over others
Terms to Regulate Disputes:
d) Either party to give notice to the other if any terms of the agreement are breached
e) The complaint must be remedied within a specified period
f) If complaint is not remedied, the aggrieved party has the right to terminate the agreement
g) In the case of the landlord, he may deduct or forfeit the Rental and Utility Deposits accordingly

Past the Honeymoon Phase – Failure to Pay Rent

Constant reminders have been sent out. The tenant just refuses to pay the rent, employing a whole range of creative excuses. What to do next?

One option is to terminate the tenancy agreement after due notice and the tenant would vacate the premises. Ordinarily, the Rental and Utility Deposits should be adequate to recover the arrears.

Sometimes, the tenant refuses to pay the rent and neither will he vacate the premises despite termination of the agreement. The landlord may then seek remedy to recover overdue rent under the Distress Act 1951. The Act allows the landlord to apply to the Court for a warrant of distress to recover rent not exceeding 12 months. Essentially, the court will send a bailiff to seize the tenant’s assets (subject to certain exceptions) and to sell them in satisfaction of the landlord’s arrears.

Upon entrance and seizure of the tenant’s goods, the bailiff will then issue a notice of seizure to the tenant which contains a copy of the inventory, the amount due and that the property will be sold unless the arrears are settled within 5 days. If the tenant fails to settle the amount due, the property seized will be sold by public auction and the proceeds will be channelled to the landlord.
Section 20(1) of the Act gives priority of payment to the landlord as opposed to other judgment creditors for an amount up to 6 months’ rental (this priority excludes claims by the Federal Government or any State Government).

The Messy Breakup – Refusal to Vacate the Premises

Unfortunately, the nightmare continues. What to do if an errant tenant just refuses to move out?

Again, notice should be given to the tenant. It is also important to note that Section 28(4)(a) of the Civil Law Act 1956 states that whenever a tenant holds over the premises beyond the period of his tenancy, the landlord can double the amount of his rent until possession is given up.

What if the notice goes unrequited? Most people would think it is justified to employ self-help measures such as breaking in or chaining up the premises.

Technically, this is not allowed. Section 7 of the Specific Relief Act 1950 requires a landlord to obtain a court order before he can recover possession of the property from a tenant.

Section 65(1) of the Subordinate Courts Act 1948 gives jurisdiction to a Sessions Court to resolve civil disputes between the landlord and tenant. The length of the court process depends on the nature and complexity of the dispute. If you have been advised by your lawyers that it is a straightforward issue with no factual disputes, a landlord can apply by originating summons and have the matter determined by affidavit evidence alone.

Conversely, if there are material disputes to facts, it is advisable to apply by Writ of Summons. Even in a Writ of Summons, it is possible to apply for a summary judgment to expedite the matter. Once a judgment in favour of the landlord is obtained, he should serve it to the tenant. If the tenant is still adamant, a Writ of Possession can be obtained. A court bailiff will then remove the tenant from the premises and secure it for the landlord.

Both landlord and tenant will always hope for a rosy affair. But reality beckons and things don’t always turn out as expected. Hence, it is always important for both sides to be versed with the law and remedies available.

Lim Wei Jiet is an advocate & solicitor of the High Court of Malaya. He is currently based in Kuala Lumpur as a Legal Associate in a boutique dispute resolution firm. He has acted for clients at the High Court & has worked regularly with Counsel on a wide range of appellate cases all up to Malaysia’s apex court.

As a Tun Suffian Foundation scholar, Lim Wei Jiet graduated with an LLB (Hons) from the University of Malaya. He spent a semester at the United States as a Global Undergraduate Exchange scholar in Political Science & International Relations.

He is passionate in public & administrative law, having represented individuals & State Governments affected by decisions of the Federal Government, public commissions, immigration, land and the various enforcement authorities.

His core areas of practice include commercial and corporate litigation, public law, defamation, intellectual property, employment and tort.