Landlord and Tenant: Dispute Resolutions
Landlord and Tenant: Dispute Resolutions

Landlord and Tenant: Dispute Resolutions

Introduction:-

With the absence of specific legislation governing the rental activities in Malaysia, the legal rights of the landlord and tenant are left to contract, that is the tenancy agreement.

In the event a tenant breaches the tenancy agreement, the landlord can initiate a civil proceeding to seek for remedies provided for under the tenancy agreement or vice versa.

However, the landlord shall not resort to self-measures such as changing the lock or to take the possession of the property by force as they may face a legal action taken by the tenants.

Do note that breaching a tenancy agreement is a civil wrong rather than a criminal wrong.

This is why many landlords who resort to lodging a police report in dealing with a defiant tenant and will usually be turned away by the police personnel to look for a lawyer.

In this article, we share on 3 basic legal recourses in the event of the breach or breaches of the tenancy agreement by either party.

2 Specific Legal Remedies Against the Tenant

1. Writ of Distress

Writ of distress is the common recourse sought by the landlord as distress proceedings consume less time compared to the civil suit and application for a writ of distress can be made ex-parte, i.e. that landlord alone could apply to the court.

The landlord only needs to serve a notice of demand as a legal precondition before applying for Writ of distress.

The purpose of the Writ of distress is to get the court’s bailiff or sheriff to go to the current address of which the tenant is still renting and seize the tenant’s movable property to recover back the outstanding rent by way of auction (e.g. furniture & electrical stuff).

It can only be used to recover back outstanding rent up to 12 completed months’ rental arrear. Although rent in arrears could be recovered in the distress proceeding, utility charges in arrears are not recoverable under the proceeding.

(Further details refer to Landlord and Tenant: Distress Action)

Note: As the name suggests, this civil procedure applies to tenants who do not pay rent on time

2. Writ of Possession

On the pretext that Section 7(2) of Specific Relief Act 1950 provides that a landlord is prohibited from evicting the tenant and/or recover possession of the property without a court order, Writ of Possession must first be obtained before you can evict the defaulting tenant. 

It is a civil procedure to sue for recovery of possession in the event the tenant commits a serious breach of the terms and conditions under the tenancy agreement which enables the landlord to opt for termination of the said agreement, be it under the agreement or the law.

Frankly, this legal approach is relatively time-consuming and costly. This is because Malaysia has yet do not have a summary procedure of eviction order, such as those that exist in the UK or Australia.

In Malaysia, the landlord must first initiate a legal proceeding to seek declaratory order to terminate the tenancy agreement before applying the Writ of Possession to execute the declaratory order.

Once Writ of possession is granted, it would have the effect of directing the court’s bailiff or sheriff to enter the rented property by using such force as may be necessary and take possession of the property for the landlord.

3. Legal Remedies for Recovery of Damages

Apart from Writ of distress and Writ of possession, landlord or tenant who is aggrieved by the breach of tenant agreement on the part of another party may at the same time seek for recovery of damages. The aggrieved party could initiate a civil proceeding to claim for compensation or such other monetary reliefs, collectively called damages

Damages are the most common form of remedy for a breach of contract or agreement.

Generally, a person instituting the legal suit will be entitled to damages if he can prove that he had suffered actual losses due to breach of agreement caused by the other party or such liquidated damages agreed under the tenancy agreement.

Example of agreed liquidated damages, if there is an early termination of the tenancy agreement where either party is entitled to recover the rentals for the remainder of the tenancy periods or the ‘unexpired’ tenancy periods.

Some recoverable damages by the landlord from the tenant include

  • unpaid rent,
  • unpaid utility bills,
  • damages to property,
  • unapproved alterations to the demised premise

thereby causes the restoration costs to be borne by the landlord.

Proposed Residential Tenancy Act

Moving forward, it must be applauded that the new government had in the Budget 2018 proposed for the enactment of the Residential Tenancy Act (estimate to be implemented within two years) to regulate residential tenancy activities in Malaysia.

It is believed that the Act will incorporate certain statutory tenancy clauses into all tenancy agreements made between landlord and tenant. It is also proposed to have an established system of registration for tenancy containing a list of the blacklisted tenants.

It is suggested that it should also provide for the summary procedure of eviction order modeled against the UK’s Landlord and Tenant Act 1985. 

 
About the Author:-

This is the transcript of our partner, Chia Swee Yik (+6016 2148 218, chia@chialee.com.my) at Ai FM radio station’s interview on legal resolutions of landlord and tenant dispute (‘FM讲法律议题:房东与租户的纠纷’) who has practical experience in dispute resolution of tenancy issues.

Feel free to contact him if you have any queries.

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