In Malaysia, there is no complete and specific law to govern tenancy contracts. In other words, if there is any dispute between the tenant and the landlord over the tenancy, the legal basis is that the judge would rely on the law of contract. Therefore, signing a tenancy is the most effective document to prove the positions of both parties.
Many people will ask whether a verbal tenancy agreement is legal and valid. The answer is yes, however in reality, when a dispute occurs, the verbal tenancy agreement would most likely show two conflicted versions from both sides. If you are a wise tenant or landlord, you would definitely opt to sign a tenancy because it is the best way to protect both parties before entering into the tenancy. To make it clearer, judges will rely on a more credible evidence in a lawsuit. “I believe that the most common problem faced by landlords when renting out a house to tenants are that tenants are owing the rent arrears. Some tenants would just occupy the landlord’s house and do not pay their rent, and treat the house as if is their own house. In this case, what can the landlord choose to do?
Firstly, the landlord must know whether he wants to recover the rent owed or terminate the tenancy agreement and evict the tenant.
If it is the former, the landlord can ask the lawyer to issue a lawyer’s letter of demand to the tenant, ordering him to pay all the debts within the specified period of time. If the tenant ignores, then the landlord can retain all the security deposit and unilaterally file a court order. Generally, the judge will award this court order when the documents are in order. With this court order, the owner can apply for a writ of distress. It must be noted that the role of the writ of distress is to require the bailiff to seize the tenant’s movable property in the residence. With this writ of distress, the landlord can go to the tenant’s residence with a lawyer or bailiff and ask the tenant to open the door and make a list of all movable properties (inventory list) inside, such as furniture. If the tenant is uncooperative or unwilling to open the door, then the bailiff or executive officer can ask the police for help to break the lock and break in to the tenant’s residence for the seizure of movable property. Generally, after counting the tenant’s movable property, the court will give the tenant one or two weeks to repay the rent owed, otherwise the tenant’s movable property will be auctioned to the public after a specified time. After deducting the fees and expenses of the bailiff, the remaining balance will be returned to the owner (tenant). The writ of distress procedure can only recover rent up to twelve months, and it will not terminate the contract. If the tenant in future owes rent arrears again, the landlord can choose to do this procedure again in order to recover the arrears. However it must be noted that this procedure is only suitable for cases with large rent arrears, because the landlord must bear the lawyer’s fees and court fees. Generally, the cases handled by the author are factories or commercial offices.
The second situation is that the landlord wants to terminate the tenancy and evict the tenant. Many people would think that if the tenant does not pay the rent, the landlord can then drive the tenant out, including changing the lock and cutting off the supply of water and electricity. Unfortunately, the owner cannot acquire the property through his own methods, even so if the property is in the owner’s name. If the landlord encounters a tenant who has a little knowledge of the relevant laws, the tenant can even turn against the tenant and file a lawsuit against the landlord for trespassing and recover their losses, and as such the landlord may have to suffer more. According to section 7(2) of the Specific Relief Act 1950, if the tenant is unwilling to relocate after the tenancy is terminated, the landlord can only order the tenant to relocate through a court order. Hence, the correct way to handle this scenario is that, if the landlord’s lawyer has issued a formal notice of eviction and the tenant has not cleared the rent owed within the specified time, the landlord must file an application into court, listing the tenant as the defendant and pursue on recovercy of debts and ownership of the property. After receiving the court order, the owner can ask the lawyer to immediately apply to the court for possession and seizure orders. After that, the court will send bailiffs or executive officers to the tenant’s residence to evict and seize the property for auction. It must be noted that if the tenant continues to occupy the house after the termination of the tenancy and does not pay the rent, according to the section 28 (4) of the Civil Law Act 1956, the landlord can apply to the court to double rental against the tenant.
Normally the courts would usually grant the owner a court order provided that the owner has evidence and the documents are in order. However, because of the troublesome procedures, the lawyer’s fees for the entire procedure are significant. In addition, the entire process takes about six to nine months, so many landlords choose to do it themselves to evict tenants. If a malicious tenant bites the landlord back, the landlord will lose more than he/she gains.
The author believes that it is time for the Malaysian government to legislate to introduce a specific act to regulate our property tenancy laws and simplify the procedures for landlords to recover the debts of owing by the tenants and take back the property ownership. Only in this way the landlord can truly enjoy the rights of being the property owner without facing the dilemma of being arrears of rent by the tenant and worrying about expensive legal fees.
BY WINSON TAN
Note: This article is for reference only and does not constitute legal advice. Therefore, if readers have any legal questions or needs, they should seek professional legal advice. If the reader suffers any loss by relying on this article, the author will not be held responsible.