Frequently Asked Questions (FAQ) – Tenancy Eviction & Rent Recovery in Malaysia

The landlord-tenant relationship is fundamental to property leasing in Malaysia, but disputes can arise, particularly concerning eviction and the recovery of outstanding rent. While landlords have the right to recover possession of their property and unpaid rents, they must navigate the legal framework to do so in accordance with established laws.

This article outlines the process of tenancy eviction and outstanding rent recovery in Malaysia, detailing key legal considerations for landlords, and referencing relevant case law and statutory provisions.

What is the legal relationship between a landlord and tenant in Malaysia?

The landlord-tenant relationship is primarily governed by the tenancy agreement. In case of disputes, particularly involving eviction or rent arrears, landlords must follow proper legal procedures under Malaysian law. Self-help eviction is not allowed.

What is the difference between a tenancy and a lease?

• Tenancy: Usually for a term less than three years; does not require registration.

• Lease: Typically for three years or more; must be registered under the National Land Code 1965.

This distinction affects the remedies and legal strength available to the landlord

When can a landlord evict a tenant?

A landlord may pursue eviction if there is a breach of the tenancy agreement, such as:

• Non-payment of rent

• Property damage

• Illegal activities on the premises

What are the steps to legally evict a tenant in Malaysia?

The process for evicting a tenant involves multiple steps, all of which require adherence to legal requirements to ensure a smooth and enforceable eviction.

a) Serving a Letter of Demand

The eviction process may begin with the issuance of a formal Letter of Demand to the tenant, demanding payment of the outstanding rent. This letter should specify a timeframe (e.g. within 14 days) for the tenant to settle the arrears. The landlord may also state in the letter that the tenancy shall be deemed terminated if the outstanding rent is not received within the specified period.

b) Serving a Notice of Vacant Possession

If the tenant fails to make payment within the stipulated timeframe, the landlord may proceed to issue a Notice of Vacant Possession, confirming the termination of the tenancy and notifying the tenant of a scheduled date for joint inspection of the premises. The tenant is required to attend this inspection and deliver vacant possession of the property on the stated date.

Key Legal Principle: A valid Letter of Demand and Notice of Vacant Possession is essential to any eviction process. The courts have consistently upheld the importance of proper service of such letters in eviction cases. In Yeoh Pang Kwan v William Janz [1972] 1 MLJ 25, the court held that failure to serve an appropriate notice could invalidate subsequent eviction proceedings.

c) Filing a Claim for Possession

If the tenant fails to vacate the property after the notice period, the landlord must file a claim for possession in the Sessions Court or the Magistrates Court, depending on the value of the rental property.

This filing marks the formal start of legal proceedings to reclaim possession of the property. The court will set a hearing date, and both the landlord and tenant will have the opportunity to present their case.

d) Obtaining a Writ of Possession

Once the court grants possession to the landlord, the landlord may apply for a writ of possession. This legal document authorizes the bailiff to remove the tenant from the property.

It is crucial to note that only a bailiff, under court order, can lawfully evict a tenant. Pursuant to section 7(2) of the Specific Relief Act 1950, any self-help attempt by a landlord to evict a tenant without a court order is illegal and could expose the landlord to legal action.

Can landlords recover outstanding rent? If yes, how?

Alongside eviction, landlords often seek to recover unpaid rent. Malaysian law provides several avenues for landlords to recover outstanding rent from tenants.

a) Civil Suit for Rent Arrears

Landlords may file a civil suit against the tenant to recover outstanding rent. The procedure for this is similar to any debt recovery action. Once a judgment is obtained, the landlord can enforce the judgment through:

·       Garnishment:  Freezing and collecting funds from the tenant's bank account.

·       Writ of Seizure and Sale: Seizing and selling the tenant's movable assets to satisfy the outstanding rent.

b) Distress Action under the Distress Act 1951

An alternative option is filing for a distress action under the Distress Act 1951, which allows landlords to seize the tenant’s movable property for unpaid rent. This remedy is particularly effective for tenants who may attempt to abscond without paying the arrears.

The landlord must apply to the court for a distress order. Upon obtaining the order, a bailiff is authorized to seize the tenant’s movable property, such as furniture or equipment, to cover the unpaid rent. However, this remedy is limited to rent arrears only and does not apply to claim for double rent or other outstanding charges like utility bills or damage to the property.

Key Legal Principle: The court in Bah Heng Hong Sdn Bhd v The Provisional Liquidator Choong Shin Cheong & Anor [1992] 3 CLJ 1421 reiterated that distress action is a remedy limited to rent arrears. The landlord cannot recover damages or penalties through distress.

What should a tenancy agreement include to protect the landlord?

A well-drafted tenancy agreement is the foundation of a landlord’s legal rights. It should clearly define:

- The rental amount and payment schedule

- Grounds for eviction, including non-payment of rent

- The tenant's obligations regarding maintenance and repair

- The right of the landlord to recover possession and outstanding rent

An unclear or poorly drafted agreement could complicate the landlord’s efforts to evict a tenant or recover rent.

What are the risks of not following legal procedures?

Landlords must strictly adhere to the legal procedures for eviction and rent recovery. Failure to serve a valid notice to quit or attempting self-help eviction measures (such as changing the locks) could expose the landlord to liability.

What is the limitation period for recovering unpaid rent?

It is important to note that the limitation period for recovering rent arrears is six years from the date the rent became due, as provided under the Limitation Act 1953. Failure to take action within this time frame could bar the landlord from recovering the debt.

What if the tenant is a foreigner and absconds?

If the tenant is a foreigner, additional complications may arise. Recovering outstanding rent from a foreign tenant who leaves the country can be challenging. In such cases, the landlord may need to explore international debt recovery mechanisms or make claims against any security deposits held.

Conclusion

While Malaysian law provides clear legal pathways for tenancy eviction and rent recovery, landlords must exercise care and diligence in following proper procedures. The courts are generally protective of tenants' rights and will not hesitate to penalize landlords for unlawful evictions or procedural missteps.

By ensuring that tenancy agreements are well-drafted, adhering to the proper legal procedures, and considering the costs of litigation, landlords can minimize risks and maximize their chances of successfully recovering possession of their property and any outstanding rent.

Landlords should also seek legal advice at an early stage of the dispute to ensure that they are fully aware of their rights and obligations under Malaysian law. With the right approach, landlords can protect their investment while maintaining good tenant relationships., the court held that failure to serve an appropriate notice could invalidate subsequent eviction proceedings.

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The content presented in this article is meant solely for offering general information and should not be considered as legal opinion or professional advice

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