Malaysia Tenancy Agreement Guide

A tenancy agreement is the written contract that sets out the terms between a landlord and a tenant: the rent, the deposit, the length of the lease, and what each side must do. In Malaysia most residential rentals run for one year or two years, renewable by mutual agreement. The document is short compared with a sale contract, but it carries real weight the moment a dispute over a deposit or an early move-out reaches a court.

Malaysian law draws a technical line between a "tenancy" and a "lease". A tenancy is a term of three years or less and does not need to be registered at the land office. A lease runs longer than three years and must be registered to bind third parties. Almost every residential rental you sign is a tenancy, so the registration step does not apply, and the key formality is stamping rather than registration.

Why the paperwork matters

There is no Residential Tenancy Act in force in Malaysia in 2026. A draft Bill has been circulating for years and, as of early 2026, remains in final drafting rather than in effect. Until it passes, every right you have as a tenant or a landlord traces back to the words in your own agreement and to general contract law. That is the single most important thing to understand: the document is the rulebook, so what you sign is what you get. For the wider picture on finding a place, negotiating rent, and tenant protections, see our broader renting in Malaysia guide.

Typical structure of a residential tenancy

1. Parties and property details
2. Term, commencement date, and renewal option
3. Rent amount, due date, and payment method
4. Deposits (security, utility, and advance rent)
5. Tenant covenants (what the tenant promises to do)
6. Landlord covenants (what the landlord promises to do)
7. Break and forfeiture clauses
8. Handover and inventory schedule

A clean agreement covers all eight. A one-page template that skips the inventory or the repair split is where most disputes start.

Stamp duty is the government charge that makes your tenancy agreement a valid legal instrument. It is assessed by the Inland Revenue Board (LHDN) and is small in absolute terms, but skipping it leaves you with a document you cannot rely on in court.

The rate structure

Duty is charged per RM250 of annual rent, and the rate steps up with the length of the lease:

A RM10 minimum applies, so very cheap or very short tenancies still cost RM10 to stamp. Each additional stamped copy (for example the landlord's counterpart) costs a further RM10.

The January 2025 change you need to know

Until the end of 2024, the first RM2,400 of annual rent was exempt from duty. That exemption was removed with effect from January 2025. Duty is now calculated on the full annual rent from the first ringgit, which slightly raised the cost for lower-rent tenancies. When you read an older blog post quoting a lower figure, check the date, because the exemption no longer exists.

Worked example

Take a flat at RM1,500 a month on a one-year lease.

• Annual rent: RM1,500 x 12 = RM18,000
• Rounded up to the nearest RM250: RM18,000 (already a multiple)
• Units of RM250: 18,000 / 250 = 72
• Duty at RM1 per unit (1-year lease): 72 x RM1 = RM72

So the stamp duty is RM72, comfortably above the RM10 minimum. If the same flat were let on a two-year lease, the rate would be RM3 per RM250, giving 72 x RM3 = RM216. Longer leases cost more to stamp because the higher rate reflects a longer commitment.

A quick reference for common rents (1-year lease)

Multiply by three for a two-year lease and by five for a lease of three to five years. The mechanics of stamp duty across property, shares, and loan documents are covered in more depth in our stamp duty guide.

The upfront cash is usually the biggest surprise for first-time tenants. There is no legal cap on deposits in Malaysia in 2026, so the amount comes down to convention and negotiation.

The standard structure

On a RM1,500 flat that is roughly RM5,250 before you move in, on top of the stamp duty and any legal fee. Budget for this from the start, because it is the single biggest cash hurdle in a Malaysian rental.

The earnest deposit trap

Before the tenancy agreement is signed, an agent often asks for an "earnest deposit" (also called a booking or holding fee), usually one month of rent, to take the unit off the market while paperwork is drawn up. If you then sign, this rolls into the security deposit. If you pull out, you typically lose it. If the landlord pulls out, it should be refunded. Get the terms of the earnest deposit in writing before you hand over a single ringgit, because verbal promises are hard to enforce.

What a landlord can deduct at the end

The security deposit is not a free extra month of rent for the landlord. In principle a landlord can only keep what covers a genuine, provable loss: unpaid rent, unpaid bills, or repair of damage beyond fair wear and tear. Normal ageing of paint, minor scuffs, and the settling of a unit are fair wear and tear and are not deductible. A signed inventory and dated photos at move-in are your strongest defence when it is time to get the deposit back.

The reform on the horizon

The proposed Residential Tenancy Act, in final drafting as of early 2026, would introduce a cap on the security deposit (reported at one month of rent) and a clearer refund timeline. None of that is law yet. Until the Bill passes and comes into force, the 3.5-month convention and whatever your agreement says are what apply.

Because the agreement is the rulebook, the clauses do the heavy lifting. Read these before you sign, and negotiate the ones that do not sit right.

Term and renewal. Confirm the start and end dates and whether there is an option to renew. A common structure is "one year fixed plus one year option", which lets you extend at a pre-agreed rent without renegotiating from scratch.

Rent and revision. The monthly amount, the due date, and any grace period. Check whether the renewal rent is fixed or subject to a stated increase, so a renewal does not come with a surprise jump.

Deposit and refund. How much is held, what it covers, and the timeline for return after you move out. A good clause states a fixed number of days (often 14 to 30) for the landlord to refund the balance after deducting proven costs.

Break clause. What happens if either party leaves early. A typical break clause lets a tenant exit after a minimum period (often after the first year of a two-year lease) with a set notice, and it defines whether the security deposit is forfeited. Without a break clause, leaving early can mean losing the whole deposit or being liable for rent to the end of the term.

Repairs and maintenance. The split of who fixes what. The common convention is that the landlord handles structural and major items (roof, wiring, built-in water heater) while the tenant covers minor upkeep and anything they damage, often up to a small per-item cap such as RM150 to RM200.

Diplomatic clause. In expat leases, this lets a tenant end the tenancy early if they are transferred out of the country or lose their work pass, usually with proof and a notice period. Ask for it if your stay depends on a job.

Quiet enjoyment and access. The landlord's right to enter should require reasonable notice (24 to 48 hours) except in an emergency. This protects you from a landlord letting themselves in unannounced.

Subletting and use. Whether you may sublet or run a business from the unit. Most residential agreements prohibit both without written consent.

If a clause is missing or one-sided, raise it before signing. Amending a draft is easy. Changing the terms after both parties have signed and stamped is not. For agreements that carry unusual terms or high stakes, a short review by a lawyer is money well spent, and our legal services guide explains how to find and work with one.

Getting the electricity, water, and internet sorted is where the practical move actually happens, and the tenancy agreement should say who does what.

The utility deposit. The half-month utility deposit inside your upfront payment is the landlord's buffer against unpaid bills when you leave. It is separate from the deposits that the utility companies themselves hold on their accounts.

Whose name is on the account. There are two common setups. In the first, the accounts stay in the landlord's name and you reimburse them each month against the actual bills. In the second, you transfer the accounts into your own name for the term. The second gives you direct control and a clean paper trail, and it is worth asking for if you will be there a year or more.

The main utility providers

Take meter readings on the day you move in. Photograph the electricity and water meter readings, dated, on handover day. This fixes your starting point and stops any argument about consumption that happened before you arrived. Do the same on the day you leave.

The inventory. For a furnished or partly furnished unit, walk through with the landlord or agent and sign an inventory list: the aircon units, the water heater, the appliances, the furniture, and their condition. Note existing scratches, stains, and faults with photos. This inventory is the document that decides deposit deductions at the end, so do not skip it even when the landlord seems relaxed.

Internet lead time. Fibre installation can take one to three weeks in some buildings, longer if the address is not yet wired. If working from home matters, check fibre availability before you sign and arrange installation as early as the agreement allows.

A tenancy runs on two sets of duties. When both sides hold up their end, disputes rarely happen. Here is the standard split under a typical Malaysian residential agreement.

Tenant obligations

• Pay rent in full and on time, on the agreed date each month
• Pay the utility bills for the term (electricity, water, internet, and any assessment or service charge the agreement assigns to the tenant)
• Keep the property clean and in good condition, fair wear and tear excepted
• Carry out minor repairs up to any per-item cap in the agreement
• Not sublet, assign, or use the property for business without written consent
• Not make structural alterations without the landlord's consent
• Allow the landlord reasonable access on notice for inspection or repairs
• Return the property in its original condition at the end, less fair wear and tear

Landlord obligations

• Give the tenant quiet enjoyment of the property for the term
• Keep the structure and major fixtures in repair (roof, walls, wiring, plumbing, built-in water heater)
• Pay the quit rent (cukai tanah) and assessment (cukai pintu) unless the agreement says otherwise
• Insure the building (the tenant insures their own contents)
• Refund the deposit balance within the agreed time after move-out, less proven deductions
• Not enter the property without reasonable notice except in a genuine emergency
• Hand over a property that is safe and fit to live in

Who pays what, at a glance

None of this is fixed by statute, so read your own agreement. Where a clause is silent, general contract law and the common conventions above fill the gap, but a clear written term always beats an assumption.

You have three realistic ways to get a tenancy agreement drawn up, and the right choice depends on the rent and how standard the deal is.

Option 1: A free or template agreement. Property portals and agents provide standard tenancy templates that cover the common ground. For a straightforward residential let at ordinary rent, a good template is enough, and your only cash cost is the stamp duty. The risk is that a generic template may miss a break clause, a diplomatic clause, or a clear deposit-refund timeline, so read it against the clause checklist above and add what is missing.

Option 2: An agent-prepared agreement. If you rent through an agent, they usually prepare the agreement and arrange stamping as part of their service. The legal or drafting fee is commonly passed to the tenant. This is convenient and fine for standard tenancies, though the agreement still deserves a careful read because the agent works for the deal, not for you.

Option 3: A lawyer-drafted agreement. For higher rents, longer terms, commercial use, or any unusual clause, a lawyer draws up and vets the agreement. Drafting fees follow a scale tied to the annual rent. As a rough guide, a standard residential tenancy commonly costs somewhere between a few hundred ringgit and around RM800 to draft and stamp, rising with the rent. The exact figure depends on the annual rent and the firm, so ask for a quote before you commit.

Who pays

By long-standing convention the tenant pays both the stamp duty and the legal or drafting fee. This is a convention, not a rule, so it is open to negotiation, and in a soft rental market a landlord may agree to split or absorb it. Whatever you settle, write it into the agreement so there is no argument later.

A note on cost versus risk. The drafting fee on a RM1,500 flat is small next to the roughly RM5,000 of deposit at stake. Paying a few hundred ringgit for an agreement that clearly protects your deposit and defines your exit is cheap insurance. Skipping it to save that amount is a false economy when a dispute costs far more in time and stress.

Since 1 January 2026, tenancy stamp duty is assessed and paid online through e-Duti Setem inside the MyTax portal. The old counter-and-cheque routine at a LHDN branch has moved fully digital. Here is the flow.

Step 1: Sign the agreement. Both parties sign every copy (usually two originals, one each, plus any extra copies). The 30-day clock to stamp starts from the signing date, so do not let the signed document sit.

Step 2: Log in to MyTax. Go to mytax.hasil.gov.my and sign in with your e-Dashboard credentials. If you do not yet have a MyTax account, register first with your identification number and set up the login.

Step 3: Open e-Duti Setem. Inside MyTax, open the e-Duti Setem (electronic stamp duty) service and choose the tenancy or stamp-assessment option.

Step 4: Enter the tenancy details. Key in the annual rent, the lease term, and the property and party details. The system calculates the duty using the per-RM250 rates and applies the RM10 minimum.

Step 5: Pay. Settle the assessed duty online, plus RM10 for each additional copy you want stamped. Payment is by the methods the portal supports (FPX online banking and cards).

Step 6: Download the certificate. Once payment clears, download the digital stamp certificate. This certificate is your proof that the duty is paid and the agreement is properly stamped. Keep it with your copy of the tenancy agreement.

Deadlines and penalties

You have 30 days from the signing date to stamp. Miss it and a two-tier late-stamping penalty applies: broadly, RM50 or 10 percent of the duty (whichever is higher) if you are late by up to a few months, rising to RM100 or 20 percent (whichever is higher) beyond that. The penalty is small in ringgit terms on a residential tenancy, but leaving the agreement unstamped is the real cost, because an unstamped instrument cannot be used as evidence in court until the duty and penalty are cleared.

A practical tip. Stamp the agreement right after signing, not "when you get around to it". The task takes minutes online, and doing it immediately means your document is enforceable from day one if anything goes wrong with the deposit or the unit.

Most tenancy trouble in Malaysia clusters around a few recurring issues. Knowing how each one works helps you avoid it or resolve it without a drawn-out fight.

The withheld deposit. The most common complaint is a landlord who keeps all or most of the security deposit at the end. Your defence is evidence: the signed inventory, dated move-in and move-out photos, and the deposit-refund clause in your agreement. If the landlord deducts for fair wear and tear or refuses to itemise the deductions, you can push back with your records. Where it cannot be resolved, a claim in the Magistrates' Court or Small Claims process is the formal route, and this is where a stamped agreement becomes essential because an unstamped one is not admissible.

Early termination. Leaving before the term ends without a break clause usually means forfeiting the security deposit, and sometimes liability for rent until a new tenant is found. If you might need to leave early, negotiate a break clause or a diplomatic clause before signing rather than relying on the landlord's goodwill later.

Repairs left undone. When a landlord ignores a major repair they are contractually bound to make, document the request in writing, give reasonable time, and keep the paper trail. Withholding rent to force the issue is risky and can itself breach the agreement, so get advice before doing it.

Eviction and distress. A landlord in Malaysia cannot simply change the locks or throw a tenant out. Lawful recovery of possession goes through the courts, and a landlord who seizes goods for unpaid rent must follow the distress procedure under the Distress Act 1951, which requires a court order. A tenant facing a lock-out or self-help eviction has a genuine grievance and should seek legal help quickly.

Where to get help

• The Magistrates' Court and Small Claims process for money disputes such as unpaid deposits
• The Tribunal for Homebuyer Claims for issues with developers (not general tenancies)
• A lawyer for eviction, distress, or any dispute above the small-claims limit
• Your state consumer affairs office for guidance

The recurring lesson across all of these is documentation. A stamped agreement, a signed inventory, and dated photos turn a "your word against mine" argument into a case you can actually win.

A short discipline at the start prevents most of the pain later. Run through this before you hand over any money or sign anything.

Before you sign

• Read every clause carefully, including the deposit, repair, and break terms as much as the rent and the term
• Confirm the deposit amounts and the refund timeline in writing
• Check for a break clause and, if you are an expat, a diplomatic clause
• Confirm who pays quit rent, assessment, and any strata service charge
• Get the earnest deposit terms in writing before paying it
• Verify the landlord actually owns the unit (ask to see the title or a recent assessment bill)

On handover day

• Walk through with the landlord or agent and sign the inventory
• Photograph every existing scratch, stain, and fault, dated
• Photograph the electricity and water meter readings
• Test the aircon, water heater, taps, and appliances
• Collect all keys, access cards, and remote controls, and note how many

Right after signing

• Stamp the agreement through e-Duti Setem within 30 days
• Download and file the stamp certificate with your copy
• Arrange the transfer or setup of utility accounts
• Set a calendar reminder for the lease expiry and any renewal-notice deadline

Money to budget upfront

Keep the paper. File the stamped agreement, the stamp certificate, the signed inventory, and all your dated photos together, digitally and on paper. When the tenancy ends and it is time to recover the deposit, this folder is the difference between a quick refund and a long argument.

These are forward-looking views rather than promises, but the direction of travel for Malaysian tenancies is toward more structure and more protection for both sides.

The Residential Tenancy Act finally arrives. The long-drafted RTA has been in the works for years, and by early 2026 it sits in final drafting. When it passes, expect a statutory cap on the security deposit (reported at one month of rent), a defined refund timeline, and a dedicated tenancy tribunal that settles disputes faster and cheaper than the courts. That would give tenants their first real statutory floor and give landlords a clear, enforceable process.

Digital stamping becomes the norm, not the novelty. The move to e-Duti Setem inside MyTax from January 2026 pushed the whole process online. Expect the flow to get smoother, with template agreements that feed straight into the calculator and instant certificates, turning a once-fiddly errand into a few minutes of clicks.

Cleaner deposit handling. As reform and digital tools spread, expect more use of documented inventories, standard condition reports, and even third-party deposit handling, all of which shrink the classic end-of-tenancy deposit fight.

More professional lettings. With build-to-rent projects and managed rental platforms growing in the Klang Valley, expect a slice of the market to move toward professionally managed tenancies with clearer terms, though the private landlord signing a one-year lease on a condo will remain the norm for most renters.

Better information for tenants. Rate transparency and guides keep improving, so the next generation of tenants should walk into a signing far better briefed than the one before. Until the RTA is in force, though, the rule stays the same: your agreement is your protection, so read it, stamp it, and keep your records.

Official resources

• LHDN (Inland Revenue Board): mytax.hasil.gov.my for e-Duti Setem stamping and stamp assessment
• LHDN main site: www.hasil.gov.my for stamp duty guidance and rates
• Your state water operator and TNB/SESB/SEB for utility account setup
• Indah Water (IWK) for sewerage account queries

Where to get help with a dispute

• The Magistrates' Court or Small Claims process for unpaid-deposit and money claims
• A practising lawyer for eviction, distress under the Distress Act 1951, or higher-value disputes
• The relevant state consumer affairs office for general tenant guidance

Documents to keep together

• The signed tenancy agreement (your original)
• The e-Duti Setem stamp certificate
• The signed inventory and condition report
• Dated move-in and move-out photos, including meter readings
• Receipts for the deposit and every rent payment

Keeping this folder complete is the single most useful thing a tenant can do. It costs nothing at the start and saves the most at the end.