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Law of Landlord and Tenant
16/06/2006 The Sun - Law & Realty By Yang Pei Keng
WHERE can you find our law on landlord and tenant?
Surprisingly, to date, our Parliament has not passed any comprehensive
legislation to cover the law on landlord and tenant.
Only piece-meal legislation can be found. It takes the form of some
provisions in the National Land Code (the “Code”). One may also look into
the case law, that is, cases decided by our Courts over the years. The
relevant English cases may also be referred to.
The law relating to rent-controlled premises (loosely described as “pre-war
buildings”) has been repealed since 1997. Today, rent-controlled premises no
longer exist in Malaysia.
Classification of tenancies
In Malaysia, “tenancies” are classified into 2 categories: “tenancies” and
“leases”. They may be loosely described as “short-term tenancies” and
“long-term tenancies”. One may wonder: what is the difference between them?
Tenancies
The term “tenancy” in law refers to a “short-term tenancy” of not more than
3 years. It may be for 1 year or 2 years. Once it exceeds 3 years, it is
usually known as a “lease”.
There are no standard terms and conditions in a tenancy. The landlord and
the tenant may agree on any terms or conditions. It is a matter of mutual
agreement.
It can be a monthly tenancy. The landlord or the tenant may give one
calendar month’s notice to terminate such tenancy. The monthly tenancy may
continue for many years if it is not terminated.
Beware of one of the conditions which is certainly not favourable to the
tenant:
Even if you pay your rentals monthly, a tenancy agreement for 3 years may
provide for payment of the rentals for the full period of 3 years, in case
of your terminating the agreement earlier. For example, if you terminate the
tenancy after 2 years of occupation, you may still have to pay the rentals
for the remaining one year. Such term is detrimental to the interests of
consumers.
Tenancies may be oral or in writing
For a tenancy, a written agreement is not a must in law. It can be oral or
by word of mouth, and that is perfectly in order. It is always valid whether
effected in writing or by word of mouth only: s.213(2)(a). To be on the safe
side, it is advisable to have a written agreement.
Leases
In contrast to a tenancy, a lease may be loosely described as a “long-term”
tenancy for a period of more than 3 years. It can be for 30 years, or even
as long as 99 years.
The longest lease is for a period of 99 years only. You may find a land
title for 60-year or 99-year lease. For example, Hong Kong had been leased
to the British for 99 years, which had expired. Hong Kong is now back to the
fold of China.
However, not every property can be leased out for the maximum period of 99
years. To create 99-year lease, it must relate to the “whole” of the
property in question. The whole property must be totally leased out, if you
wish to create a 99-year lease: s.221(3)(a).
If you lease out only “part” of a your land, you can only create a 30-year
lease at the most: s.221(3)(b). For example, if the total area of your land
is 10 hectares, and anyone intends to lease only 1 hectare (2.5 acres) of
the land for planting fruit trees, you can only give him a 30-year lease
only.
To have a valid lease, you must prepare it in a form prescribed by the Code.
It must be registered with the Land Authority. These are the distinct
features of a lease.
However, an unregistered lease may still be valid in law if it fulfils
certain conditions. It is known as “an agreement of a lease”, but it does
not enjoy the same protection as a registered lease. A registered lease is
better protected because it is officially registered on the land title.
In the case of a 3-year tenancy, there is no prescribed form, and it need
not be registered. You may, however, apply to have it endorsed on the land
title kept by the Land Authority under certain provisions in the Code.
Rule of law must prevail
The Code is a piece of Federal legislation, an Act of Parliament. It must be
strictly complied with by everyone. Government department or statutory
bodies are no exception. Every person is equal before the law. This is one
of the basic principles of the rule of law.
However, some authorities, wittingly or unwittingly, appear to have
disregard this. A good example is: when a tenant rents a house in a certain
town and applies for supply of water and electricity to the house, the
authorities concerned may insist that the tenant must produce a written
tenancy agreement for inspection.
Such a request can easily be complied with if the tenant has signed a
tenancy agreement with his landlord. However, he may not have a written
agreement, but only an oral tenancy with his landlord. As shown above, that
is in law perfectly in order.
In such circumstances, if the authorities concerned still persist in their
demand for a written tenancy agreement for inspection, then it is tantamount
to total disregard for the law.
Perhaps, the authorities want some proof of the existence of the tenancy. If
so, a letter from the landlord confirming the tenancy would serve the
purpose. Such letter ought to be accepted as good evidence of the tenancy.
If the authorities concerned are minded to adopt such reasonable and
sensible approach, they would certainly be lauded or commended for having
due regard for the rule of law. At the same time, the tenant would be spared
the necessity of “concocting” a tenancy agreement, solely for the purpose of
satisfying the excessive demand of the authorities that is inconsistent with
the law.
The writer is a member of the Conveyancing Practice Committee Bar Council
Malaysia www.malaysianbar.org.my |
