ALAN, a 22-year-old technician who’s renting an apartment in Kuala Lumpur with his mother, rides home from work everyday on his motorcycle while juggling bottles of water.

The piping in his apartment is in urgent need of being replaced – something his landlord has agreed to fix.

But that was three months ago.

“I have had to fill up bottles of water from my workplace everyday and bring them home for my mother and me, as the piping in our apartment is non-functional,” Alan laments.

“Whenever I go to speak to my landlord, he’s either always busy or not around. I want to move out but I can’t afford a new place right now,” he says.

On the other side of the spectrum, Wahid, a 38-year-old accountant, has been renting out an apartment unit he owns in Ipoh, Perak, for the past three years. He lives in Shah Alam, Selangor.

Due to the distance, he only travels to Ipoh when necessary. Recently, a new tenant moved in and things were “great” for about two months.

“I suddenly stopped getting my rental payments and when I tried contacting the tenant, he would not answer my calls.”

Concerned, Wahid travelled to Ipoh to find out if everything was alright. To his horror, the apartment unit was not only abandoned, it was also thrashed; while the “tenant from hell” was nowhere to be found.

“Not only did I not get my rental payments, but I have also had to incur additional costs due to repairs,” Wahid says, fuming.

Instances of landlords and tenants being cheated and even mistreated is not uncommon, as it happens all over the world.

On the local front, the government has proposed to enact the Residential Tenancy Act (RTA) to better protect the interests of tenants and landlords.

According to reports, the Housing and Local Government Ministry is scheduled to table the RTA in parliament within the first quarter of 2022.

If enacted, the RTA is set to be a milestone for the country, as there is yet to be any specific legislation that governs landlords and tenants in Malaysia.

Recently, the government decided to seek feedback for the proposed enactment of the RTA via a month-long public consultation process, undertaken by the Housing and Local Government Ministry.

The consultation process, which ends on Monday, has received mixed views over the proposed RTA.

Savills Malaysia Sdn Bhd group managing director Datuk Paul Khong says the proposed RTA is a good legal platform to assist in addressing and resolving tenancy issues and to safeguard the interests of both landlords and tenants equitably.

“This proposed framework further provides for the setting up of a rent tribunal and to address tenancy agreement matters and all issues between the two parties.

“We believe that the proposed RTA and its tribunal will be a leap forward in Malaysia’s maturing real estate scene,” he tells StarBizWeek.

With the tribunal, Khong says the costs of legal action will be minimised substantially and provide quicker response time.

“It will help mediate issues which range from the indiscriminate raising of rents and evictions, discrimination of tenant profiling and also from the landlord’s point of view of issues dealing with recalcitrant tenants.

“The introduction of a fair and uniformed template for a residential tenancy agreement will be extremely helpful to standardise and streamline all major issues and also where both parties know their rights well.”

At the moment, Khong says the rights and obligations of tenants and landlords are still based on different tenancy agreements or even by word of mouth.

“Many agreements may not even be drafted in accordance with existing laws such as National Land Code 1965.”

Among the proposals under the upcoming RTA include a two-month security deposit for rental units that is to be handed to a government agency for safekeeping.

This proposal has not been particularly well received.

In a statement earlier this week, the Malaysian Institute of Estate Agents (MIEA) said the provisions of the RTA is imperfect and inadequate and needs to further engage with stakeholders to improve its weaknesses.

“The main concern is that of deposit collection, where an independent institution is to hold the deposit on behalf of the landlord.

“While this is practised in many developed countries, administering the refund where the landlords need to claim for cost of repairs on a timely basis will hamper his ability to get the repairs done on a timely basis and will result in income loss.”

MIEA says this will directly impact the rental market, especially when there are disputes and where the tribunal could take as long as 120 days to resolve.

“Where money is concerned, a faster, efficient and seamless process needs to be introduced to administer this concern.”

MIEA adds that the proposed provision of being able to collect security deposits not exceeding two months may be low, as cost of replacement and repairs can run much higher for high end properties.

“As such, there should not be a blanket fixed amount and there should be a two-tier security deposit provision for property rentals of certain value to meet the contingencies.”

The institute adds that repossession of a rented premise by the landlord can only happen on the “order for possession by the tribunal.”

“This is an area that hopes to address the disputes between landlord and tenant in a more effective manner than how it presently is.

“This could be an area of concern if the timeline for settlement is too long and if all disputes require a tribunal for settlement.”

If the RTA is to be made law, National Housing Buyers Association (HBA) secretary-general Datuk Chang Kim Loong says the RTA’s main objective is to protect the legitimate interests of landlords against errand tenants and protect tenants against irresponsible landlords.

“HBA is concerned with the intended scope of this RTA as it also claims, as was reported, to cover matters such as “rent control” for housing areas and perceived racist practice on potential tenants.”

Chang says the proposed RTA should not include both of these areas, as rental is always based on a free market.

“Rental is a private commercial arrangement between a willing tenant and willing landlord and the government should not interfere in such arrangements.”

Chang says the government would be sending the wrong message to the investing public at large by trying to interfere in such private rental arrangements.

“If the government is going to interfere with rental for residential housing, there will be calls to also interfere in the rental of commercial properties.

“The government will then be forced to cap rentals for even shopping malls, food courts, restaurants and office buildings.

“This will definitely drive away our local and foreign investors.”

Meanwhile, Raj, a 40-year-old IT executive who is renting a unit in Ara Damansara and also renting out a property elsewhere, believes that the RTA is unnecessary.

“Why reinvent the wheel when the government can just strengthen or tighten existing laws? I believe in the free market, that everything should be done between willing parties (owner and tenant).

“I believe the government has no right to get involved with rental deposit monies in any shape or form when the property is not owned by them.”

Raj believes that the property owner should have all rights to the monies at all times to protect their asset.

“I am both a landlord and tenant and in my experience, as long as both parties clearly spell out in writing what is agreeable and not agreeable and sign on it and have it stamped. That’s it!”

Chang meanwhile believes that the establishment of a database consisting of blacklisted landlords and tenants would be beneficial for parties on both sides.

“If there is a seriousness in proceeding with the RTA, we suggest that close monitoring of landlords and tenants be carried out perhaps by a system to identify errant landlords and wayward tenants.

“Such information or a rating of landlords and tenants via a blacklisting and rating system or database should be made available to the market to assist other landlords and potential tenants in their decision-making before executing a tenancy agreement.”

Khong says the main challenges of the RTA are to strike a perfect balance between both ideologies of a “free market” and a “highly-regulated market,” as well as to be able to safeguard both landlord and tenant interests equitably.

“Whilst the RTA is being drafted, various hybrid models can be assimilated from the established ideas and practical experiences from other countries and be further adapted based on the local customs and practices,” he says.

Source: TheStar,February 26, 2022