Consumers Association of Penang

Giving voice to the little people...since 1970

Pressing need for a Tenancy Act

Malaysia urgently needs a Tenancy Act (TA) which will offer protection to both landlords and tenants. A Tribunal should also be set up under the TA to settle disputes between both parties.  

Tenants often complain about landlords that raise rents indiscriminately and impose unreasonable conditions.  On the other hand landlords complain about bad tenants that do not pay rents and the difficulty of getting rid of them.

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Having a TA will help solve the many problems that often arise from a tenancy landlord relationship.

Under the TA standard agreements should be used to ensure that the terms and conditions are fair to both parties. (Additional terms are permissible if they do not conflict with the terms of the standard agreements). Since the agreements are standardized they should be made easily available and free of charge.

Under the TA, the tenant will also know what his rights are. For example a tenant has the right to inspect the building before signing the agreement; to be given a copy of the tenancy agreement; the right to have a premise that is fit to live in and to have reasonable repairs and maintenance done.

The tenant will also be given responsibilities like having to pay the rent on time; not to damage the premise; not to use the property for unlawful purposes and to settle the utility bills.

On his part the landlord is expected to provide and maintain the premises in a livable condition. He also has to comply with all building, health and safety standards and to allow the tenant quiet enjoyment of the rental unit.

The question of security deposit will also be covered by the TA. The TA will lay down the maximum security deposit that can be collected, when it has to be paid and when the balance (if any) has to be refunded.  

Subletting or assignment of tenancy will also come under the TA.  The TA will state the conditions under which subletting or assignment can occur and what action the  landlord can take when it is carried out  without his consent.

The TA will also dictate when advance notice of the pending rental increase has to be given to the tenant. The permissible rental increase under the TA will be based on a formula which will take into consideration the inflation rate, amongst other factors.

Once the premise is rented out, the TA will list the conditions under which the landlord may enter the rented unit provided he has given the required advance notice to the tenant.

Sometimes the tenancy is terminated early.  The TA cover the circumstances under which either the landlord or the tenant may terminate the tenancy and  the amount that can be claimed for losses suffered due to its early termination.
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For example the landlord may terminate the tenancy if the rent is in arrears for two months or the tenant has caused substantial damage to the property. On the other hand, the tenant too may also end the tenancy if the landlord has breached a material term of the tenancy agreement.

The landlord who wants a troublesome tenant to vacant the premise has to strictly follow a set of procedures as laid down in the TA.   He can then recover the costs incurred (e.g. bailiff fees) in removing the tenant.

The setting up of a Rent Tribunal is important as it will serve as a cheap and fast way to resolve tenancy disputes. The Tribunal’s decision will be legally binding and it will also have the power to penalise landlords and tenants who disregard the Tribunal’s order.

Issues that can be handled by the Tribunal will include disputes over early termination of tenancy, getting an Order to remove a tenant, getting an Order to compel the landlord to repair the rental unit and monetary compensation for tenancy related issues.

The TA and the Rent Tribunal will benefit tenants and landlords as it provides protection to both parties and at the same time remove the uncertainties in tenancies. Apart from consumers, the TA should also cover the tenancies of small businesses as they too are often in a weak bargaining position when negotiating with the landlords.  

Press Statement - 31   May  2012