Renting Guide



Renting Guide

Regardless of what’s your reason to rent instead of buying, here are a few checklists that you may want to consider:

1. Affordability

The issues of affordability depends on the location, type of property, furnish or unfurnished units, tenancy period, amenities, level of security, neighbourhood profile and etc.

2. Location

For working adults, the area should not be too far from your work place whilst for student or family with school going kids, you would like to choose somewhere close to school or campus. It’s good that you check out the area before deciding to rent and also to get opinion from friends or acquaintances who have stayed/lived there before. Also, to do a travel distance analysis during peak and off-peak period to ensure you are comfortable with the distance and travelling time. However, be prepared for a trade-off between property close to amenities such as schools, shopping complex and traffic congestion.

3. Type of Property

Generally, properties can be classified as landed and non-landed

  • Landed properties are detached, semi-detached, and link houses
  • Non-landed are condominiums, apartment units and flats.

In general, non-landed properties (though there are landed development now offering similar facilities) have facilities such as 24-hour security surveillance, swimming pool, gymnasium etc. Be prepared to pay additional charges or higher rent for properties with such facilities.

4. Duration of Tenancy

The usual term is one to three years. A shorter tenancy would generally result in higher rent. Do not sign for tenancy longer than one year if you are unsure you will like the place. It is a norm for tenants to request from the Landlord to allow the option to extend the tenancy if you so desire and of course at a revised rent depending on the market condition.

5. The Tenancy Agreement and Deposits

Upon successful negotiation of rent and terms and conditions of tenancy and before you proceed with the execution of Tenancy Agreement, you are required to prepare the following deposits to be paid to the Landlord: -

  • Monthly Rent – to be paid in advance and upon the execution of Tenancy Agreement.
  • Security Deposits – between 2-3 months of the monthly rents. We have also encountered Landlords requesting for 6 months security deposits. The purpose of the security deposits is to ensure that the rent will be paid and the Tenant perform other conditions in the Tenancy Agreement (e.g. paying for damage caused by the Tenant). If there is no premature determination clause permitted in the Tenancy Agreement, the security deposit will usually be forfeited by the Landlord for non-fulfilment of tenure of Tenancy. Unless permitted by the Landlord, the security deposit shall in no way be used by the Tenant to offset the unpaid rent on expiration of Tenancy.
  • Utilities Deposit – it is not uncommon for Landlord to request the Tenant to pay the Utilities Deposit upon the execution of Tenancy Agreement. This deposit could be used by the Landlord to pay any outstanding utilities bills left unpaid by the Tenant. This deposit is usually equivalent to half the month’s rent depending the type of property and nature of use.
6. Legal fee For Tenancy Agreement

Do not prepare your own tenancy agreement. Let the professionals handle them. Both the Tenant and Landlord shall be responsible for the payment of their own legal fee.

The standard legal fee chargeable for Tenancy Agreement are as follows:

First Rm10,000 annual rental 25% of the monthly rent
Next Rm90,000 annual rental 20% of the monthly rent
More than Rm100,000 annual rental Negotiable
7. Stamping fee for Tenancy Agreement

The Tenancy Agreement is a legal document that clearly outlines the obligations of both the Landlord and Tenant hence stamp duty charges has to be paid. Adopt the following formula for calculation of stamp duty :

[(Rental rate x 12 months) – 2400]/250 x Amount based on duration of tenancy

For every RM250 in excess of RM2,400 in annual rental :

Duration of Tenancy Amount
1 year or less RM 1
>1 year to 3 years RM 2
>3 years onwards RM 4
  • The first RM2,400 of your annual rental income is exempted from stamp duty
  • Additional copy of Tenancy Agreement is set at a flat rate of RM10 per copy
8. What should be included in a Tenancy Agreement

The Tenancy Agreement is a legal document that clearly outlines the obligations of both the Landlord and Tenant. The following are some of the important points to be noted in a Tenancy Agreement :

  • The details of the property being rented (type of house, location).
  • The purpose of rental (in this case, residential).
  • Landlord’s personal detail
  • Tenant’s personal detail
  • The duration of the tenancy
  • The rental amount.
  • The deposit amounts
  • How and when the monthly rental will be paid.
  • Inventory list (if the tenancy includes furniture and fittings)– advice to have photos of the inventories attached to the Tenancy Agreement.
  • The obligations of the Landlord.
  • The obligations of the Tenant.
  • Renewal clauses
  • Predetermination clause (if applicable)
  • Expatriate’s Clause

Always insist on your solicitor to verify the ownership of the property you are renting and ensure only the registered owner(s) is the one signing the Tenancy Agreement (unless there is proper authorisation to sign otherwise). Also, to insist all owners to sign the Tenancy Agreement (if there are more than one owner).

9. End of the Tenancy
  • Treat the property that you are renting as though it is your own house. By paying the rent does not give you the right to trash the property.
  • Ensure you have paid all the rent as this will facilitate the return of your security & utilities deposit by the Landlord.
  • At the end of tenancy, ensure all bills are paid. Furniture and fittings are in the same condition as they were.
  • Remember to redirect all your mails to your new address.
  • Conduct a proper handing over of the property back to the Landlord.