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THE ISSUE
What are the current protections for landlords and tenants?
Currently, Malaysia lacks specific legislation dedicated to governing residential property tenancies and landlord-tenant relationships. Current protective measures put in place to protect landlords and tenants are only held by tenancy agreements which can be patchy, unclear and subject to interpretation. Without the Residential Tenancy Act (RTA), landlords and tenants are forced to navigate a complex web of general laws, including the Specific Relief Act (1950), Contracts Act (1950), Distress Act (1951), Civil Law Act (1956), Limitation Act (1953), Rules of Court (2012), National Land Code (2020) and Akta Perkhidmatan Bomba (1988).
Current government responses
In a Strategic Plan (2021 - 2025, amended 2023) by the Ministry of Housing and Local Government, the ministry stated that it intends to enact laws and policies to meet the needs of the real estate industry and to protect all beneficiaries. In response to this goal, the Residential Tenancy Act was set to be drafted by 2024 by the ministry.
Minister of Housing and Local Government (KPKT), Nga Kor Ming, emphasised that the proposed act supports a legal framework that is neutral and does not discriminate against any race or religion.
Housing & Local Government Minister Nga Kor Ming, Image via NST
How are landlords and tenants affected by the lack of structure?
The complexity of the current landscape burdens landlords and tenants as it can lead to confusion, inconsistent enforcement and prolonged disputes, emphasising the need for a comprehensive legislative solution.
For landlords, the eviction process in Malaysia is both time-consuming and expensive. Landlords are required to first serve an eviction notice, then file for eviction in court, obtain a court order, and finally enforce the eviction with the assistance of a court bailiff, police, and firefighters. This process can take up to 6 months and cost up to RM10,000.
For tenants, the risk of unjust eviction and disputes become higher as a result of unclear guidelines and expectations. Most prevalently, however, is the lack of clear legislation against racial and ethnic discrimination which has supported an environment where racial preferences stated on online rental property listings have become a common sight for tenants looking to rent.
Without a central rental tribunal, disputes become expensive and lengthy for landlords and confusing for tenants
Racial discrimination in Malaysia’s rental market
The lack of clear legislation against racial and ethnic discrimination which has supported an environment where racial preferences stated on online rental property listings have become a common sight for tenants looking to rent.
A YouGov survey found that 21% of Malaysians experienced ethnic discrimination when renting, affecting 46% of Indian Malaysians, 20% of Chinese Malaysians, and 18% of Malays. The State of Discrimination Survey by Architects of Diversity reported that 19% of Malaysians face such bias, with Indian Malaysians impacted most at 35%.
An investigation into rental listings on a popular website further revealed that nearly half of all listings in the Klang Valley rejected Indian tenants outright, while those that accepted them often charged an average of RM107 more and restricted access to properties further from Kuala Lumpur’s centre.
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Rental discrimination is commonly found on online property listing sites. Screenshots via FMT
What is missing in our current legal landscape for rental protection?
In Malaysia, there isn’t a clear set of rules outlining the rights and responsibilities of landlords and tenants, which makes it easy for misunderstandings to arise. Without these guidelines and an impartial Rental Tribunal present to mediate disputes, both parties may have different expectations, leading to conflicts that could be avoided.
Establishing a clear, fair framework would help both landlords and tenants understand their roles, creating a more stable and balanced rental experience for everyone. By defining these responsibilities through the RTA, we can build a rental system where everyone knows what’s expected, reducing disputes and supporting a more equitable rental ecosystem.
A lack of clear framework for tenancy agreements causes misunderstandings to arise as both landlord and tenant are unclear of each other's roles.