For Tenants

What to Know Before Signing a Tenancy Agreement in Malaysia

Renting a property in Malaysia is an exciting milestone, whether you’re a resident or an expatriate. However, before moving into your dream home, it’s crucial to understand the terms and costs associated with the tenancy agreement. Knowing about tenancy agreement charges in Malaysia and other legal aspects will help you avoid surprises and ensure a smooth renting experience.

Understanding the Tenancy Agreement in Malaysia

Understanding the Tenancy Agreement in Malaysia-Tenancy Agreement Charges in Malaysia

A tenancy agreement is also called a lease or rental agreement and is defined and is basically an agreement between the landlord and the tenant. They highlight the rights of any party involved in the rental agreement agreement arrangement while in operation.

Key components of a tenancy agreement include:

  • The rental amount and payment frequency.
  • Lease length (Such as one year or two-year lease).
  • Security deposit and other charges were some of the indicators that were fully realized when due.
  • Liability of the landlord and tenant.

This is your basic agreement for your tenancy, and consequently, it is essential to read it before signing any agreement.

What Are Tenancy Agreement Charges in Malaysia?

What Are Tenancy Agreement Charges in Malaysia_-Tenancy Agreement Charges in Malaysia

Tenancy agreement charges include costs incurred when preparing the rental agreement, the receipt of which is stamped, and completion. These charges typically include the following:

TENANTS: Most landlords hire a lawyer or an agent to prepare tenancy agreements. The legal fees are generally recovered from both the tenant and the landlord or as may be agreed.

Legal Fee Structure:

  • First, RM 10,000 annual rent: 25% of one month’s rent.
  • Next, RM 90,000: 20% of one month’s rent.
  • Rent exceeding RM 100,000: Negotiable.

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Stamp Duty

Stamp duty is a mandatory government tax for legalizing the tenancy agreement. The tenant typically pays it.

Stamp Duty Calculation:

Stamp duty = (monthly rent x no. of months) – 2400 x 0.004.

For example, if your monthly rent is RM 2,000:

Annual rent = RM 24,000.

(RM 2,400 x number of employees) = RM 21,600.

Stamp duty = 21600 x 0.004 = 86.40.

Want to know exactly how much stamp duty you’ll need to pay? Calculate it now with our easy-to-use Stamp Duty Calculator!

Security Deposit

Security deposit is fully recoverable and is used by the landlord in case the tenant causes some damage to the premises or leaves unpaid utilities. Most landlords believe the amount is equivalent to two months of rent.

Learn more about common reasons for deposit deductions:

Things to Consider Before Signing a Tenancy Agreement

Things to Consider Before Signing a Tenancy Agreement-Tenancy Agreement Charges in Malaysia

Review the Terms Thoroughly

Read every clause carefully to avoid misunderstandings. Key sections to focus on include:

  • Termination notice period.
  • Terms for deposits back.
  • Ownership about: repair and/or maintenance.

Negotiate Where Possible

Some clauses, such as the rent rise or maintenance obligation may be negotiable. It is, therefore, advisable to talk to the landlord about these issues before signing the intended tenancy agreement.

Check the State of the Property

Make a physical assessment of the property to establish any previous damages that were registered. Document and photograph any condition and get this documented with the landlord to avoid differences in the future.

Understand Renewal Terms

If you will dwell in the house for several years ask if the contract may be renewed and if the rent will be adjusted upon renewal.

Call for Another Copy of the Agreement

You should also have a copy of the tenancy agreement signed for your own file. This will be important in arbitration. Byan 3, page 224.

Common Mistakes to Avoid

Common Mistakes to Avoid

Overlooking Additional Charges

Some landlords charge extra charges such as management or maintenance fees. Clarify these upfront.

Ignoring the Fine Print

Each group also means that some form of penalties or restriction may be incurred for which the person was unaware due to not reading the agreement carefully.

Paying Deposits Without a Signed Agreement

Never pay the security deposit or other fees until both parties sign the tenancy agreement.

FAQs

What is the purpose of tenancy agreement charges in Malaysia?

These charges cover legal fees, stamp duty, and other costs for drafting and finalizing the rental contract.

Who pays the stamp duty for a tenancy agreement in Malaysia?

The tenant typically pays the stamp duty, although this can sometimes be negotiated.

Can tenancy agreement charges in Malaysia be negotiated?

Yes, legal fees and other charges may be open to negotiation, depending on the landlord.

How long does it take to finalize a tenancy agreement?

Finalizing a tenancy agreement usually takes 1–2 weeks, depending on the availability of both parties.

Is a tenancy agreement compulsory in Malaysia?

While it is not a legal requirement to have a written tenancy agreement it is highly advised as to protect the rights of both the landlord and the tenant.

What happens if there’s a dispute over the tenancy agreement?

Negotiation and legal mediation can be used in the handling of disputes. They also provide that a well-prepared and concise written contract lowers the risk of the occurrence of disputes.

Understanding tenancy agreement charges in Malaysia and other key aspects of the rental process ensures you’re well-prepared to secure your ideal home. If you just Google the terms, prepare for additional expenses, and keep in touch with your landlord, your renting experience will be much less stressful.

Accompanying the need to have adequate knowledge of such basics in every aspect of renting focus on rights and duties that must be respected to safeguard the interests of the tenant at any given moment whether it is at the initial stage of renting for the first time, or renewal of the lease.

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