Mastering Tenancy and Lease: Your Guide to Renting in Malaysia

5 min read|Last Updated: April 1, 2024|

To rent is to engage in a legally binding contract that provides an individual, organization, or entity with the privilege to inhabit and utilize a property owned by a different party for a defined duration.

If you are a foreigner, residency isn’t a prerequisite for renting an apartment. Demonstrating that you have arranged for accommodation is a necessity for foreign individuals aiming to obtain a temporary stay visa.

Lease and tenancy matters are usually regulated by the Contracts Act 1950, National Land Code, Civil Law Act 1956, Distress Act 1951, and Specific Relief Act 1950. It is estimated by 2023, the new Malaysian Residential Tenancy Act which specially caters to tenancies will come into force.

Lease VS Tenancy

While “tenancy” and “lease” are often used interchangeably, there is an apparent legal distinction in meaning. Therefore, selecting between a Lease and a Tenancy is crucial based on your specific renting requirements. The differences between a lease and a tenancy are outlined in the table provided below:

Lease Tenancy
Rental period Minimum 3 years and a maximum of 99 years for a whole alienated land, and 30 years for a part of a land
(S221(3) National Land Code)
Less than 3 years
(S213(1)(a) National Land Code)
Requirement for Registration Yes No
Requirement for validity Form 15A and payments according to Section 301A NLC, alongside Lease Agreement Tenancy agreement between the landlord and tenant

License

On the other hand, a license grants you the right to stay on a property without giving you full ownership or control over it. Unlike a lease or tenancy, being a licensee does not grant exclusive rights to the property Furthermore, licenses usually can’t be transferred to other people, and they don’t affect the rights of people who might own the property later on. Hence, those who are looking to rent will usually lean towards a lease or tenancy arrangement.

How To Rent a Property in Malaysia

  1. Engage with an Agent or Contact the Landlord
    Choose whether to work with a real estate agent or communicate directly with the landlord to inquire about available properties.
  2. Property Viewing
    Schedule appointments to visit the properties you’re interested in. This allows you to assess the condition, layout, and suitability of each property in person.
  3. Negotiation and Offer
    If you find a property that meets your preferences, submit either a verbal or formal offer to the landlord. If necessary, engage in negotiations to finalize the rental terms that work for both parties.
  4. Lease or Tenancy Agreement
    Once the terms are agreed upon, a comprehensive lease or tenancy agreement is prepared. This legally binding document outlines the rental terms, responsibilities of both parties, and other important details. Both you (the lessee/tenant) and the owner of the property will sign this agreement.
  5. Financial Obligations
    Before moving forward, be prepared to fulfill financial obligations. This typically includes paying a security deposit, which is usually equivalent to 1-3 months’ rent, along with other potential fees like an agency consultation fee and stamp duty.
  6. Property Handover
    On the agreed-upon commencement date of the lease or an earlier possession date, the property is officially handed over to you. This marks the start of your occupancy.
Wan Yi

Required Documentation when Renting Property in Malaysia

Before finalizing the lease or tenancy agreement and securing a rental property, you will usually be asked for the following documents:

  • A Passport with a validity of at least 6 months.
  • An employment pass or student visa.
  • A signed lease/ tenancy agreement.
  • Stamp duty and disbursement fee: This is a one-time payment amounting to 15% of your monthly rent. It covers the preparation of the tenancy agreement
  • A security deposit equivalent to 2 months of rent: This deposit is refundable at the end of your tenancy, minus any repair costs due to damages during your stay.
  • A utility deposit: This deposit is also refundable at the end of your tenancy, after deducting any outstanding utility bills.
  • Advance payment of 1 month’s rent.

Coming over to Malaysia as an expat? We can assist you with the application for an Employment Pass.
Looking for a place to rent to start a company in Malaysia? Take a look at our company incorporation information and services.

Things to take note of when Renting in Malaysia

  • Punctual Payment
    The renting agreement outlines the rent fees, excluding management fees and rates. It’s crucial to specify the payment schedule (usually monthly) and method (check, cash, or bank transfer). In cases where the tenant has repeatedly failed to uphold the terms outlined in the contract or tenancy agreement, an eviction notice can be issued.
  • Utilities & Maintenance
    Unless otherwise noted, tenants are accountable for utility costs such as phone, gas, and electricity. Negotiations may incorporate these expenses into the contract terms.
  • Furnished Arrangement
    Creating a comprehensive list of the furniture and appliances provided under the lease is essential. While certain items might be provided (such as stovetops, refrigerators, and washing machines), there could be exclusions from the arrangement.
  • Stamp Duty on Lease Agreements
    The stamp duty rate for lease agreements is determined by the Stamp Act 1949. The calculation of stamping fees depends on both the monthly rental amount and the duration of the lease. For every RM250 of the annual rental above RM2,400, a stamp duty of RM4 applies. If the annual rental falls below RM2,400, no stamp duty is required.

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FAQs

Can I rent a place in Malaysia as a Foreigner?2023-09-07T12:13:08+08:00

Yes, as long as you have a valid passport and/ or Visa. Oftentime, proof of employment through the Employment Pass, of education through your university offer letter will also be asked for.  

Must my rental agreement be in written form?2023-09-07T12:15:05+08:00

While S 213(2) of the Malaysian National Land Code states that a tenancy will be valid after being effected through written form or word of mouth, it is essential to have a written tenancy/ lease agreement to protect yourself in the case of disputes arriving from your occupation in the property.

I did not pay rent on time, can my landlord immediately evict me?2023-09-07T12:10:37+08:00

Landlords are prohibited from undertaking any action against their tenants without first obtaining a court order. This pertains to situations where a tenant, regardless of their negligence, defaults on the payment of their monthly rent. 

If you have repeatedly failed to uphold the terms outlined in the contract or tenancy agreement, the issuance of an eviction notice aligns with the provisions set forth in the agreement itself. However, it is essential that this notice incorporates a specified grace period. This allows the tenant ample time to arrange their departure, facilitate an official handover of all apartment-related items, and settle any outstanding rental dues. 

Can my landlord remove my belongings without my consent after I am evicted?2023-09-07T12:04:58+08:00

According to Section 7 (2) of the Specific Relief Act 1950, if a property is rented and the tenancy ends, but the occupant remains, the rightful owner can only regain possession through court proceedings. A landlord cannot remove your belongings without your consent.

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