Key Takeaway

A tenancy agreement under the Contracts Act 1950 protects both landlord and tenant by clearly defining rights, duties, and dispute remedies.
Stamp duty is required for admissibility in court; an unstamped agreement cannot be tendered as evidence until stamped.
Standard deposits in Malaysia include 2 months security + 0.5 month utilities; earnest deposits act as booking fees.
Tenancy (<3 years) and lease (>3 years) differ; leases must be registered under the National Land Code 1965.
Landlord–tenant disputes are resolved through the civil courts, such as the Small Claims Court (≤RM5,000), Magistrates’ Court (≤RM100,000), or higher courts depending on claim value.

Table of Contents

A tenancy agreement in Malaysia is a legally binding contract that defines rent, deposits, rights, and responsibilities for landlords and tenants. It protects landlords from unpaid rent or damage and ensures tenants’ right to fair use and legal recourse in disputes.

Too many Malaysians still rely on “janji mulut” rental deals, until a landlord withholds a two-month deposit or a tenant disappears after a month or so. When that happens, both sides quickly learn why a written, stamped agreement isn’t optional.

Today, you’ll find everything you need to know about tenancy agreements in Malaysia, from essential clauses and standard deposits to stamp duty, legal fees, and what to do if disputes arise.

Comparison Table: Tenancy vs Lease in Malaysia

Feature	Tenancy (<3 years)	Lease (>3 years)
Duration	Up to 3 years	More than 3 years
Legal Basis	Contracts Act 1950	National Land Code 1965
Registration	Not required	Must register at Land Office
Common Use	Residential, short-term rental	Long-term commercial or property investment
Enforceability	Valid with stamping	Valid with registration & stamping

What Is a Tenancy Agreement in Malaysia?

A tenancy agreement is a written contract between a landlord and tenant, recognised under the Contracts Act 1950, that governs the rental of property in Malaysia.

It sets out the very important terms that bind both parties, such as rent, deposits, duration, and obligations, in a way that is legally enforceable.

Without it, both parties face higher risks of disputes that may be difficult to prove in court.

Why It Matters for Landlords

Provides a legal basis to recover unpaid rent or property damage.
Acts as written proof when filing for eviction or pursuing compensation.
Protects property value by clearly defining what tenants can and cannot do.

Why It Matters for Tenants

Prevents sudden or unfair eviction, since landlords must follow due process.
Secures the right to quiet enjoyment of the property without interference.
Clarifies obligations on repairs, deposits, and rent payments, reducing grey areas.

“In Malaysia, verbal agreements are common but risky, without a stamped tenancy agreement, you cannot rely on it as evidence in court.”

What Terms Must Be Included in a Tenancy Agreement?

A valid tenancy agreement in Malaysia must set out clear details about the parties, property, rent, deposits, and responsibilities.

These elements make the contract enforceable and reduce the risk of future disputes and a bunch of headaches during a Sunday afternoon.

Parties’ Details

Full legal names of landlord and tenant
NRIC number (for Malaysians) or passport number (for foreigners)
Contact information such as address, phone number, and email

Property Details

Full address of the property (unit/lot number, street, postcode, state)
Type of property (condominium, landed house, shoplot, or room rental)
Furnishing and fixture list (air-conditioners, furniture, appliances), attached as inventory

Tenancy Duration

Start and end dates of the tenancy
Renewal clause (notice period for extension, typically 1–3 months)
Early termination terms for both landlord and tenant

Rent and Deposits

Monthly rental amount and due date (commonly before the 7th of each month)
Standard deposits in Malaysia:
- Earnest deposit: 1 month advance, acts as booking fee
- Security deposit: 2 months’ rent, protects landlord against loss/damages
- Utility deposit: 0.5 month’s rent, covers unpaid bills

Responsibilities of Each Party

Landlord: Pays quit rent, assessment tax, ensures property is habitable
Tenant: Pays rent and utilities, maintains property in reasonable condition

Restrictions

Property must not be used for illegal purposes (gambling, unlicensed business)
Renovations require landlord’s prior consent
Subletting only allowed with written approval

A well-drafted tenancy agreement should cover all legal, financial, and practical terms, anything left vague could later turn into a dispute. If there’s confusion, always clarify before signing.

Landlord vs Tenant Responsibilities in a Tenancy Agreement

Aspect	Landlord Responsibilities	Tenant Responsibilities
Taxes & Fees	Pays quit rent and assessment tax	—
Property Use	Provides habitable premises	Uses property only for agreed purpose (residential/commercial)
Rent & Bills	—	Pays rent on time and settles utility bills
Repairs	Handles structural and major repairs	Maintains daily upkeep; reports defects promptly
Furniture/Fixtures	Ensures items listed in inventory are provided and functional	Keeps furnishings in reasonable condition
Legal Compliance	Drafts tenancy agreement in line with law	Abides by property rules and local regulations
Subletting/Renovation	Approves or denies subletting/renovation requests	Cannot sublet or renovate without consent
Privacy & Access	Grants quiet enjoyment without interference	Allows landlord access only with prior notice

How Much Are Tenancy Agreement Fees in Malaysia?

Tenancy agreement costs typically include stamp duty, legal fees, administration (agency) fees, and sometimes estate agent commission.

Stamp Duty (LHDN, Stamp Act 1949- Effective 1 January 2025)

As of 2025, the RM2,400 exemption has been removed. Stamp duty is calculated on every RM250 of annual rent or part thereof, based on tenancy duration:

Tenancy Duration	Stamp Duty Rate	Example (RM18,000/year rent)
≤ 1 year	RM1 per RM250	RM72
1–3 years	RM3 per RM250	RM216
3–5 years	RM5 per RM250	RM360
> 5 years	RM7 per RM250	RM504

Example Calculation: Rent = RM1,500/month → RM18,000/year. ÷ RM250 = 72 units. For 2 years (1–3 yrs band), 72 × RM3 = RM216.

Additional copies: RM10 each (one for landlord, one for tenant).

Who pays: Liability follows the Stamp Act 1949, but in practice, tenants usually bear the stamp duty on the principal tenancy.

Important: Agreements must be stamped within 30 days of signing. Late stamping attracts penalties, and unstamped agreements cannot be admitted as evidence in court.

Legal Fees (Solicitors’ Remuneration Order 2023)

Under the Solicitors’ Remuneration Order (SRO) 2023 (in force since 15 July 2023):

Rent ≤ RM10,000/month: 30% of 1 month’s rent (minimum RM500)
Rent > RM10,000: Between 15% and 25% of 1 month’s rent
Who pays? Usually shared. The landlord pays for drafting, the tenant covers vetting and stamping. In practice, the tenant often pays if they initiate the agreement.

Solicitors can give up to 25% discount on scale fees.

Administrative Fees

Admin fee: RM100–RM300, depending on monthly rent. (RM150 for rent RM1,000–1,999/month)
Who pays? Tenant, unless agreed otherwise.

Estate Agent Fees

Estate agent commission: Typically 1 month’s rent for yearly tenancies, but often negotiable between 20–25% of 1 month’s rent.
Who pays: Contractual. BOVAEA/LPPEH regulates practice and maximums but does not mandate who pays. Confirm in writing with the agency.

Source: Property Guru Malaysia

What Happens if a Tenancy Agreement Is Breached?

Breaches occur when either landlord or tenant fails to honour the tenancy agreement, and the most common reason being unpaid rent, illegal subletting, or property misuse. Here’s how disputes are typically handled in Malaysia:

1. Notice of Demand

The innocent party must first issue a formal written notice.
Tenants are usually given 14 days (or as stated in the agreement) to remedy the breach.
Skipping this step can weaken a case in court.

2. Termination of Agreement

If the breach is not rectified within the notice period, the tenancy may be terminated. Typical triggers include:

Non-payment of rent for 2 months or more
Using the property for illegal purposes (gambling, drugs, unlicensed business)
Breach of “quiet enjoyment” by the landlord (harassment, unlawful entry)

3. Court Remedies

Landlords or tenants can file in the civil courts to enforce rights. Depending on claim size:

Small Claims Court (≤ RM5,000): Fast, no lawyers required.
Magistrates’ Court (≤ RM100,000): Standard process for unpaid rent or damages.
Sessions or High Court (> RM100,000): For larger or complex disputes.

Common remedies sought include:

Eviction orders to legally remove a tenant
Claims for damages (e.g., arrears, property repairs, unpaid utilities)

4. Enforcement of Judgment

If a tenant refuses to comply after judgment, the landlord may apply for:

Writ of possession (repossession of the property)
Garnishment orders (deduct from bank accounts or salary)

Clarifier: Tribunal Jurisdictions

The Tribunal for Consumer Claims (TTPM) covers consumer–supplier disputes, not tenancy contracts.
The Housing Tribunal (TTPR) is for homebuyer–developer issues.
The Strata Tribunal handles disputes between residents and management bodies.

This is a major misconception many tenants and landlords face, we hope we clear it up.

“A breach of tenancy agreement in Malaysia doesn’t automatically mean eviction. The law requires due process, notice, proper documentation, and, if needed, formal legal or tribunal action.”

Common Mistakes in Tenancy Agreements

Mistake	Why It Happens	Consequence
Not stamping agreement	Parties try to save costs or skip the LHDN process	Agreement is inadmissible in court; late stamping attracts heavy penalties
No renewal clause	Oversight or assumption tenancy can “auto-continue”	Disputes over rent hikes or eviction when the term ends
No inventory list	Landlords don’t document furniture/appliances provided	Conflicts on deposit refunds due to damage disputes
Verbal-only agreements	Parties rely on informal “janji mulut”	Hard to enforce rights; claims may be dismissed without proof
Unclear responsibilities	Agreement doesn’t specify who pays taxes/repairs	Unexpected bills or unclaimed repairs create financial

Building a Stronger Tenancy Agreement

A tenancy agreement protects both landlords and tenants by ensuring clarity, enforceability, and fairness. Beyond costs and clauses, it’s about safeguarding trust and reducing disputes.

At Press, we believe clear communication builds stronger relationships, in property, business, and brand reputation.

If you want to safeguard your business credibility or navigate complex agreements, our digital PR agency provides strategies that keep your brand trusted and respected.

Book a free consultation today to learn how our PR services can protect your reputation and ensure your message carries weight.

Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice, tenancy advice, or professional consultation. For advice tailored to your situation, please consult a qualified lawyer, licensed estate agent, or the relevant government authority.

Tenancy Agreement in Malaysia: Rights & Stamp Duty Explained