Contributed by Messrs & Partners founder Eunice Tan Mui Lee
Importance of Tenancy Agreement
TO procure the interest of the landlord and the tenant, a tenancy agreement will be signed between the two parties. A tenancy agreement is a contract which lays down all the mutually agreed terms and conditions of rent of the property. The tenure for a tenancy is less than three (3) years. There are only some common clauses stated in the agreement in the market or those prepared by the agents, but there is NO standard tenancy agreement.
Each deal is subjected to the mutually agreed terms and conditions, and this agreement will be the basis of the cause of action if there is any dispute in the tenancy agreement.
Landlord’s Common Challenges
1. Recovery of Outstanding Rental
The landlord shall give notice of remedy to the tenant to pay the outstanding rental within the time frame as per the tenancy agreement before the landlord proceeds with the legal proceeding to recover the outstanding rent in court as a breach of the terms and conditions of the tenancy agreement.
- Recovery of Vacant Possession of the Property
Landlords may face challenges to recover the vacant possession of the property upon the expiry or the termination of the tenancy agreement. In such circumstance, the landlord shall serve a notice of termination with a specific time frame to deliver the vacant possession of the property to the tenant.
If the tenant fails to redeliver the vacant possession of the property within the particular time frame, the landlord is entitled to claim for DOUBLE rental for the holding period of the property by Civil Law Act 1956 until the possession is given up by the tenant to the landlord. Other than that, the landlord can apply and obtain an eviction order from the Court vide Specific Relief Act 1950.
Some of the “self-help” methods of changing or breaking the padlocks of the property is not a good idea as the landlord may be slapped with a civil suit to claim for the loss of personal belonging.
In this situation, it is advisable to lodge a police report and break in with the presence of the police. The photo should be taken of the interior of the property with the deed of breaking in to avoid further complication.
- Sub-letting the property to the third party
Usually, there is a clause of non-sub-letting or non-assignment to the third party without the consent from the landlord in the tenancy agreement.
However, some tenants may quietly sub-let the property to other people without the permission of the landlord.
All the parties who stay in the property vide sub-letting shall be deemed as joint trespassers, and thus the landlord is entitled to sue them, and they are jointly and severally liable with the tenant in mesne profits even though the landlord has no formal landlord and tenant relationship with the trespassers.
- Joint inspection
It is strongly advisable to have a joint inspection upon the expiry or termination of the tenancy agreement. This is to ensure that there is no loss or destruction of the property before the landlord refund the security deposit to the tenant especially for those that rent the property with fittings and fixtures.
There is one real-life example; the tenant returned the keys to the landlord without a proper written notice of termination and joint inspection. The next morning, the landlord was shocked to receive a letter of demand from the tenant that they have lost their cash and jewellery.
Therefore, the landlord should be more dilligent and conduct a joint inspection upon the expiry or the termination of the agreement.
Tenant’s Common Challenges
1. Sale of the Property during the Tenancy
It is advisable for the tenant to include a clause in the Tenancy Agreement that if the Landlord intends to dispose or sell the property, the disposal or the sale of the property shall be bound by the existing tenancy agreement.
- The landlord becomes bankrupt
If the landlord becomes bankrupt, the property will be auctioned off by the financial institution. Once there is a successful bidder to bid the property, the successful bidder shall serve you a notice of termination to enable you to redeliver the vacant possession of the property.
If the tenant does not comply with the notice, the successful bidder may obtain an eviction order vide court proceeding.
Eunice Tan is the founder of both LegalMakeover and Messrs Eunice Tan & Partners.
The views and opinions expressed in this article are solely those of the original author. These views and opinions do not necessarily represent those of StarProperty.my.