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Why do we need a Residential Tenancy Act?

Did you know that everyone may be signing a totally different tenancy agreement today when we rent a home? Depending on negotiation power, the agreement may be extremely lopsided to the owner (most of the time) or the tenant (sometimes). If we have a Residential Tenancy Act, then there is no need for anyone to draft their own tenancy agreement but to follow a standardised one based on legislation. There is also no need to argue on who gets more because the Tenancy Act is supposed to be fair to both sides; landlords and tenants.

Article in freemalaysiatoday.com Deputy Housing and Local Government Minister Ismail Muttalib said the government is expected to table the Residential Tenancy Act in 2021 to monitor the rental market and protect tenants and house owners. Currently, the rental market is not monitored by any particular agency.

The bill is expected to protect tenants from being forced to vacate premises without proper notice and act as a framework for the rental property market. Article in freemalaysiatoday.com

Some advantages to the landlord?

The hardest part has always been to remove the tenant if they stop paying rental. It could take months. Please do not try to remove the tenant by force yeah. With a tenancy act, it usually comes with very specific grounds for the homeowner to regain possession of their home. In other words, the remedy is now a standardised one and the process is likely to be very clear too.

There may not be a need to pay lawyers for a draft of the tenancy agreement since it’s now a standardised agreement. Just need to print out a copy, fill in the necessary details and have it signed and then stamped. Of course, even now one is able to download some free copies from online but truth is, it may not be as water tight as needed. Remember yeah, the home is worth a few hundred thousand and the rental may just be over a thousand ringgit. Make sure the tenancy agreement is a good one.

Some advantages to the tenant?

it does provide a more standardised and predictable rental protection. Now, the landlords could not suddenly terminate the tenancy agreement or increase the rental just because they receive a better offer or that there’s now more demand versus supply in the market.

It may even include some rental ceiling to some areas to curb from excessive rental increase. By the way, if it comes to the need for legislation, the rental would have already reached some critical levels and the homeowner may just be laughing to the bank every month they receive the rental from the tenant.

Well, let’s hope it does not get delayed any further and will really be tabled this time so that it can help the market. May not help all home owners or all tenants if they have a much better deal currently but it should provide a standard to the whole market as a whole and I take that as a positive thing.

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Next suggested article: Itmay just be the owner and not the tenant’s issue.

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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One Response

  1. This is a big mistake….especially for Home owner….they have this in western countires…it started with good intentions to help both tenant and landlord….now it has become a political issue….tenant demanding more protection to the extend that home owner unable to get their property back when they neeed it. There used to be 2 months notice period….now its been extended to 6 months….look at the mess that has been created when Govt interferes in any sector with control and legislation….the property market need to be free based on supply and demand….if there is no freedom then we will slowly end up like a communist country…everything is controlled for everyone except for the people in power who are not subject to the rules they apply to others….look around and see whats going on in China (controlled) and also Socialist western countries (socially controlled)…learn from history….Malaysia can do better….we need to ensure free market if the country wants to progress…do not follow the path of legislating everything…you will end up paying the price of loosing freedom….there are more tenants which means more voting power….all the owners rights will disappear with time…look at mess in England….there is a war going on between landlords/home owners and tenant groups….

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