©The Sun (Used by permission)
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The law relating to rent–controlled premises (loosely described as “pre–war buildings”) has been repealed since 1997.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?
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.
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
Note: This column is brought to you by the Malaysian Bar Council for your information only. It does not constitute legal advice. You should therefore seek professional legal advice for your specific needs. Neither the Malaysian Bar nor the Sun Media Corporation Sdn Bhd shall be liable to any reader who suffers losses as a result of relying on this column.