Tenancy or lease renewal in Malaysia
Renewing a tenancy or lease agreement in Malaysia typically involves reviewing the existing terms, negotiating new conditions if necessary, and formalizing the extension through a new agreement or an addendum. This process usually occurs between the landlord and tenant.
It is advisable for both parties to discuss the renewal of a tenancy or lease agreement several months before the current agreement's expiration date. This allows sufficient time for negotiation of new terms, adjustments to rental rates, and preparation of new documentation, which helps avoid last-minute complications or uncertainty regarding occupancy.
Start 60 days ahead
This lead time allows for negotiation, agreement on new terms, and drafting/review of the new contract well in advance of the current agreement's expiry.
The process
- 1Review the existing tenancy agreement to understand current terms, renewal clauses, and notice periods.
- 2Initiate communication with the other party (landlord or tenant) to express interest in renewing the agreement.
- 3Negotiate new terms, such as rental price, duration of the lease, and any changes to the original conditions.
- 4Draft a new tenancy agreement or an addendum to the existing agreement, incorporating all agreed-upon changes.
- 5Review the drafted document carefully to ensure it accurately reflects all agreed-upon terms.
- 6Both parties sign the new agreement or addendum, and stamp the document if required by law for enforceability.
What to bring
- Existing tenancy or lease agreement
- Identification documents of all parties (e.g., NRIC for Malaysians, passport for foreigners, company registration for corporate entities)
Who handles it
Landlord and Tenant (Penyewa dan Tuan Rumah)
The primary cost associated with renewing a tenancy or lease agreement is typically the stamp duty, which is calculated based on the rental amount and lease duration. Legal fees may also apply if a lawyer is engaged to draft or review the new agreement. Specific rates should be confirmed with the Inland Revenue Board of Malaysia (Lembaga Hasil Dalam Negeri Malaysia) or a legal professional.
What commonly goes wrong
- Ensure all agreed-upon changes, especially regarding rent, duration, and maintenance responsibilities, are clearly written into the new agreement or addendum.
- Be aware of the notice period stipulated in the original agreement for renewal or non-renewal.
- Understand the legal implications of a tenancy agreement, particularly concerning stamp duty for enforceability in court.
- Confirm whether the renewed agreement needs to be witnessed or attested for validity.
Sources
This guide is based on one official source.
Other documents in Malaysia
Tenancy or lease renewal in other countries
Often renewed together
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