Renting in Malaysia: A Complete Guide for Tenants
So, you’ve decided to rent a place in Malaysia—great choice! Whether you’re moving here for work, starting fresh, or just enjoying the tropical lifestyle, renting can be a straightforward process if you know what to expect. But, like anywhere else, there are a few things to watch out for. In this guide, we’ll break down what tenants need to pay for when renting in Malaysia, the steps involved, and some common pitfalls to avoid.
For a fun short video on the matter, view the instagram video below!
https://www.instagram.com/reel/C_HH7CFyBYi/?utm_source=ig_web_copy_link&igsh=MzRlODBiNWFlZA==
The Costs of Renting: What You Need to Know
1. Security Deposit
- Amount: Typically, the security deposit in Malaysia is two months' rent. This is to cover any potential damages to the property during your tenancy.
- Who Gets It: The landlord holds onto this deposit until the end of your lease.
- Refunds: At the end of your tenancy, if the property is in good condition (normal wear and tear expected), you should receive the full deposit back. However, if there are damages, the landlord can deduct the cost of repairs.
2. Utility Deposit
- Amount: Usually equivalent to half a month’s rent, but can be more. Landlords who have been burned before by tenants leaving the air con on 24/7 then skipping rent and disappearing leaving a massive bill, tend to have equivalent to a full months rent
- Purpose: This covers any unpaid utility bills when you move out, such as electricity, water, or gas.
- Refunds: Like the security deposit, this is refundable at the end of your tenancy, assuming all bills are settled.
3. Advance Rent/Earnest Deposit
- Amount: One month’s rent in advance.
- Purpose: This covers your first month of rent, so you’re essentially paying for the month ahead.
- Who gets it: This is sent to your Real Estate Agents Client account. Not the real estate agents personal account As they act as Stakeholders whilst the tenancy agreement is being finalised.
- When do you pay: The earnest deposit is paid alongside signing the Letter Offer to Rent which outlines the terms of what the Tenancy agreement will be. (The agent will provide this.
Security and Utility Deposits are only paid once the Tenancy Agreement is signed.
4. Tenancy Agreement Fees
- Who Pays: The cost to prepare the tenancy agreement is usually paid bt the tenant but can requested be split between the tenant and the landlord.
- What It Covers: This legal document outlines the terms and conditions of your tenancy, so it's essential to ensure everything is in order before signing.
- Stamp Duty: A government-mandated fee is also applicable, calculated as a percentage of the annual rent. This too is typically paid by the tenant but can be requested to split between tenant and landlord.
5. Agent Fees
- Who Pays: In Malaysia, the landlord usually pays the real estate agent’s commission. However, it’s good practice to confirm this upfront so there are no surprises. Some agents have started charging for searching services for the tenant. This isn’t standard and I would not continue with an agent who is charging this.
The Process: From Offer to Keys
1. Finding the Right Property
- Whether you’re browsing online listings or working with a real estate agent, finding the right property is the first step. Ensure you visit the property, check out the neighbourhood, and ask any relevant questions.
2. Making an Offer
- Once you’ve found a place you like, you’ll need to make an offer. This is usually done through your agent, who will negotiate on your behalf. If the offer is accepted, a Letter Offer will be signed by both tenant and owner and the earnest deposit (aka your first month in advance) to the Agency as a Stakeholder, then you’ll move on to the next steps.
3. Signing the Tenancy Agreement
- After agreeing on the rent, it’s time to sign the tenancy agreement. This document should be thoroughly reviewed to ensure all terms are clear, including the rental period, deposit amounts, and responsibilities of both parties.
4. Payment of Deposits and Advance Rent
- Once the agreement is signed, you’ll need to pay the security deposit and utility deposit. These payments are usually made via bank transfer directly to the owner.
5. Handover of Keys
- After all payments are made, and the tenancy agreement is signed, you’ll receive the keys to your new home! At this stage, it's crucial to do a walkthrough of the property, documenting its condition with photos or a checklist. It’s recommended to have “deep clean” and instructions to fix anything major before the handover written in the Letter offer and Tenancy Agreement. Use the handover as an opportunity to confirm these instructions have been followed.
This will help avoid disputes when it’s time to move out.
Common Pitfalls and What to Watch Out For
1. Unclear Terms in the Agreement
- Make sure every detail is clear in the tenancy agreement, from maintenance responsibilities to the conditions for breaking the lease early.
2. Security Deposit Disputes
- To avoid disputes over the security deposit, document the condition of the property when you move in. This can include taking photos or videos of the property’s current state. In anycase, your Real Estate Agent will know good lawyers to help push things along if needs be.
3. Utility Bills
- Ensure that the utility bills are transferred to your name if required, and keep track of your payments to avoid any issues when moving out.
4. Unregistered Tenancy Agreements
- It’s important to ensure the tenancy agreement is stamped and registered with the Inland Revenue Board of Malaysia. An unstamped agreement might cause issues if legal disputes arise. Your agent should be on top of this. Follow up with them.
Other things to consider
The Timeline
The whole process from giving an offer to handover of keys can take anywhere from 2 weeks to a month, depending on how quickly negotiations unfold.
You’ll also want to give yourself a few weeks to view several places. So a good time to start is about 6 weeks before your preferred move in date.
Partially Furnished?
The term partially furnished is extremely vague. Make sure you know what you need or don't need already in your new home.
Units labelled as ‘Partially Furnished’ can mean anything from ‘Just kitchen cabinets and air conditioners installed’ to ‘Bed frames, washing machine and fridge included’.
‘Landed’ and ‘Bungalow’
If you are not from Malaysia, you might not know what these terms are representing
Landed and Non-Landed
Landed is referring to any ‘House’. Bungalow, Semi-Detached, Terrace, Single Storey, 2 Storey, 3 Storey etc are all ‘Landed’ properties.
Non-Landed are referring to High-rises. Apartments, Condominiums, Serviced Residence, Branded Residence.
Bungalow
In Britain, for example, a bungalow is specifically a single storey dwelling. In Malaysia it’s a detached landed property with any number of storeys.
Flats
Again to use Britain as an example all apartments are ‘flats’. But in Malaysia a Block of Flats or “Walk-up-flats” are Apartment blocks that are only 5 levels high and do not provide elevators or lifts. These are considerably cheaper and used by locals.
Commercial Title and Residential Title.
This doesn’t really affect tenants but it will have an impact on your bills - so its worth being aware of.
Utility bills are considerably cheap if comparing to say, Europe at the moment. The land title determines the amount companies charge for electricity, water and gas. If a place is on residential land, like most landed homes, the bills are considerably cheaper compared to commercial land which can be 30%+ higher in costs. Branded Residence (Hotels with Residences attached) Serviced Residences (Likely a condo that allows AirBnB) or Condos that have shops below them are all Commercial Titles. It still won't break the bank - but the difference is noticeable if you move from one to the other
Renting in Malaysia can be a smooth process if you know what to expect and take the time to understand your responsibilities as a tenant. With these tips, you’ll be well on your way to settling into your new home with peace of mind.
