Whether you are a landlord renting out a property, a tenant looking for a place to call home, or a property agent managing rental transactions, having a proper tenancy agreement is an important part of the rental process. A tenancy agreement helps both parties understand their rights, responsibilities and obligations throughout the rental period. In Malaysia, preparing the agreement carefully can help minimise misunderstandings and provide a written reference if disputes arise.
In this guide, we cover everything you need to know about tenancy agreements in Malaysia, including their purpose, essential clauses, how to prepare one, the next steps after signing, and the costs involved.
A tenancy agreement is a written contract between a landlord and a tenant that sets out the terms and conditions for renting a property. It typically specifies the property being rented, the tenancy duration, monthly rental, deposits, payment arrangements and responsibilities of both parties.
In Malaysia, tenancy agreements are commonly used for residential properties such as apartments, condominiums, landed houses and rooms. They may also be used for commercial properties, although the terms can differ depending on the nature of the rental.
A well-prepared tenancy agreement gives both parties a clear understanding of what has been agreed upon before the tenancy begins.
A tenancy agreement is more than just paperwork. It helps establish clear expectations and provides a written record of the rental arrangement.
Without clear written terms, disagreements over rental payments, deposits, repairs or early termination may become more difficult to resolve.
a. Property and Parties’ Details
The agreement should clearly identify the landlord, tenant and rental property. Common details include the full names of the landlord and tenant, identification or registration details where appropriate, the property address and relevant property details, and contact details of the parties. Ensure that names and property details are accurate and consistent with the relevant documents.
b. Tenancy Period and Renewal Options
The tenancy period establishes when the rental arrangement begins and ends. The agreement should state the commencement and expiry dates, duration, whether renewal is permitted, and the notice period and conditions for renewal. If renewal is allowed, specify how the tenant should exercise the option, when notice must be given and whether the rental amount may change.
c. Rental Amount, Deposits and Payment Terms
Financial arrangements should be documented clearly. The agreement should specify the monthly rental amount, payment due date and method, security deposit, utility deposit if applicable, conditions for deductions and deposit return, and consequences of late or missed rental payments. Any promises about payments or deposits should be recorded in writing.
d. Landlord’s Responsibilities
The agreement should outline the landlord’s obligations during the tenancy. Depending on the arrangement, these may include handing over the property in an agreed condition, addressing certain structural or major repairs, and ensuring the tenant can use the property in accordance with the agreed terms. Clarify how repair requests should be reported and who is responsible for particular maintenance costs.
e. Tenant’s Responsibilities
Tenants should understand their obligations before occupying the property. These commonly include paying rent on time, maintaining the property in a reasonable condition, paying utilities or other charges as agreed, reporting maintenance issues promptly, avoiding unauthorised alterations or activities, and returning the property in the agreed condition, subject to fair wear and tear.
f. Rules and Restrictions
Depending on the property and the parties’ agreement, rules may cover subletting, keeping pets, smoking, making alterations, using the property for business purposes or exceeding permitted occupancy. For condominiums and apartments, relevant building management rules may also apply. Restrictions should be communicated clearly and agreed upon before the tenancy begins.
Preparing a tenancy agreement from scratch can be time-consuming, particularly for property agents who manage multiple rental transactions. The agreement needs to reflect the actual arrangement between the landlord and tenant, so important details should not be overlooked.
Step 1: Gather the necessary information
Collect the landlord’s and tenant’s details, property information, rental amount, deposits, tenancy period and any special conditions agreed upon.
Step 2: Confirm the rental terms
Ensure both parties agree on the financial arrangements, maintenance responsibilities, renewal options and termination conditions.
Step 3: Prepare the tenancy agreement
Organise the agreed terms into a clear written document. Check that the clauses reflect the actual arrangement and address property-specific requirements.
Step 4: Review all information carefully
Check names, dates, rental amounts, deposit figures and other important details. Both parties should have an opportunity to review the agreement before signing.
Step 5: Arrange signing and stamping
Once the agreement is finalised, arrange for the relevant parties to sign it and proceed with stamping in accordance with applicable requirements.
If you are looking for a more convenient way to prepare your tenancy agreement, we offer an online Draft Tenancy service for under RM100. Visit our Draft Tenancy service page, complete the application form and upload your booking form in PDF format. You can also include additional remarks or special instructions where necessary.
a. Review and Sign the Agreement
Both landlord and tenant should review the final document and ensure that the terms accurately reflect their agreement. Arrange for the relevant parties to sign the agreement and retain copies for their records.
b. Arrange for Stamp Duty and Stamping
In Malaysia, tenancy agreements are generally subject to stamp duty under the applicable stamp duty rules. The agreement should be submitted for stamping within the applicable deadline. Under the general rule, instruments executed in Malaysia are typically required to be stamped within 30 days of execution; different rules may apply to documents executed outside Malaysia. An instrument that has not been duly stamped may face restrictions on its admissibility as evidence until applicable requirements are met, subject to the law. For current procedures, deadlines and charges, refer to the Inland Revenue Board of Malaysia (LHDN).
c. Keep Copies of the Completed Documents
After signing and completing the relevant stamping process, both parties should retain copies of the agreement and related records. Property agents should also keep transaction records organised so documents can be retrieved when needed.
The cost of preparing and completing a tenancy agreement depends on the services required. It is useful to distinguish between the fee for preparing the agreement, applicable stamp duty and any additional service charges.
We offer its Draft Tenancy service for less than RM100. Submit your application online and provide the necessary booking form and information through the website.
Stamp duty is separate from the fee for drafting a tenancy agreement. The applicable amount depends on factors such as rental terms, tenancy duration and relevant stamping rules. Additional charges may apply depending on the circumstances, including duplicate copies or late stamping. If you already have a tenancy agreement, you can use our online Stamping service to submit your existing document for processing. The website provides a stamping fee calculation based on the information entered, helping you review applicable charges before submitting your application.
Official stamp duty and service fees are different charges. Check the latest applicable requirements and fee breakdown before making payment.
A properly prepared tenancy agreement helps landlords, tenants and property agents establish clear expectations and manage rental arrangements more confidently. From confirming rental terms to reviewing the agreement and arranging stamping, every step matters. Taking the time to prepare accurate documentation can help reduce misunderstandings and make the rental process more organised.
Whether you need help preparing a new agreement or arranging stamping for an existing one, we provide convenient online services to help simplify the process.
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Disclaimer: This article is intended for general information only and does not constitute legal or tax advice. Stamp duty requirements, deadlines and rates may change. Please refer to LHDN or a qualified professional for advice specific to your circumstances.
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