Tenancy Agreements
Preparing and reviewing residential and commercial tenancy agreements, including deposit terms, the term, and the rights of landlord and tenant.
A tenancy agreement should be stamped so that it is admissible in evidence in court. Stamp duty is calculated on the annual rent and the term. Deposits are commonly two months rent plus half a month for utilities, but that is market practice rather than a rate fixed by law.
A tenancy agreement is a document that is rarely read closely until something goes wrong. At that point unclear terms become expensive.
Stamping is not a formality
An unstamped tenancy agreement is not admissible in evidence in court until stamp duty and a penalty have been paid. That means if a dispute arises, the party relying on the agreement has to pay the duty and penalty before it can be produced.
Stamp duty at the time the agreement is signed is far cheaper than duty plus penalty later.
The terms that most often cause disputes
Based on the matters we handle, three things most often lead to disputes: who is responsible for particular repairs, in what circumstances a deposit may be withheld, and how much notice is required to end the tenancy.
All three can be settled with clear terms in the agreement, written before a problem arises rather than after.
An inventory for furnished property
For property let furnished, an inventory signed by both parties is the single most useful document when a dispute about damage arises. Without one it is difficult to establish the condition of the property when the tenant moved in.
What your lawyer handles
- Preparing a tenancy agreement setting out the term, rent, deposit and the responsibilities of each party
- Reviewing an agreement put forward by the other side before you sign it
- Setting out terms on repairs, maintenance and permitted use of the property
- Setting out the consequences if rent is not paid or the property is damaged
- Attending to stamping of the agreement with the Inland Revenue Board
- Advising on the options available where a term is breached
Documents you need to prepare
- Copy of the identity card of the landlord and the tenant
- Copy of the title or proof of ownership
- Details of the rent, deposit and term agreed
- An inventory of furniture and fittings if the property is let furnished
Costs people often overlook
- Legal fees for preparing the agreement
- Stamp duty based on the annual rent and the term
- Cost of copies and certification
- Service tax of 8% on legal fees
When to stop and get advice first
- The agreement does not clearly allocate responsibility for repairs between landlord and tenant
- There is no inventory for a furnished property, making a damage claim difficult
- A term allowing the landlord to terminate without reasonable notice
- The agreement is not stamped, which affects its admissibility in evidence
- The tenant pays a deposit before reviewing the agreement and inspecting the property
Frequently asked questions
Why does a tenancy agreement need to be stamped?
An unstamped document is not admissible in evidence in court until stamp duty and a penalty are paid. Stamping at the outset is cheaper.
How much is stamp duty on a tenancy?
It is calculated on the annual rent and the term. We can work out the exact figure from your details.
How much deposit is normal?
Market practice is commonly two months rent as a security deposit and half a month for utilities. It is not a rate fixed by law and can be negotiated.
The tenant is not paying rent, what can I do?
The options depend on the terms of the agreement and the circumstances. A landlord cannot change the locks or remove the tenant's belongings without a lawful process.
Can a landlord raise the rent during the term?
Only if the agreement allows it. Otherwise the rent stays the same until the term ends.
Who pays for repairs?
It depends on the terms of the agreement. Commonly the landlord bears structural repairs and the tenant bears day to day maintenance, but this needs to be stated clearly.
Ready to start your property matter?
An initial consultation with no obligation. Tell us about your matter and we will explain what is involved and what it is likely to cost.
No. 4, Jalan Setia Impian U13/3D, Setia Impian 3, Seksyen U13, Setia Alam, 40170 Shah Alam, Selangor
014-9723468 · 014-4004293 · Monday to Friday, 9:00am to 6:00pm