Residential Tenancy Act Can Strengthen Protection For Tenants, Property Owners

By Rozainah Abdul Rahim

KUALA LUMPUR, Aug 12 (Bernama) -- The proposed Residential Tenancy Act under the National Housing Policy (DRN) 2026-2035 could create a more transparent, safe and balanced rental market by clearly defining the rights and responsibilities of tenants and property owners.

Real estate management expert from Universiti Teknologi MARA (UiTM), Prof Dr Rohayu Abdul Majid, said the proposed Standard Tenancy Agreement could provide a standard framework covering key matters such as tenancy duration, deposits, rental rates, maintenance, utility bills, termination notices and renewal terms.

She said property owners should be responsible for the structure, basic systems and damage not caused by tenants, while tenants should be liable for damage resulting from misuse or negligence.

"A Residential Tenancy Tribunal could also provide a fast and low-cost avenue for resolving disputes, particularly over deposits and rental arrears, without requiring parties to go through lengthy court proceedings," she told Bernama.

Rohayu said a Centralised Deposit (Escrow) system could further protect both parties by placing deposits in a neutral account or under regulatory supervision, preventing disputes over refunds and unpaid arrears.

"It could also ensure reasonable deposit amounts, allow landlords to make legitimate deductions and ensure deposits are returned to tenants within a specified period after they move out," she said.

She said clear eviction procedures were also needed to prevent property owners from taking unilateral action against defaulting tenants, such as changing locks or cutting off utilities, while allowing reasonable access for inspections and repairs with prior notice, except in emergencies.

On the issue of ‘bird's nest houses’ modified to accommodate dozens of rooms, Rohayu said the Act could require such modifications and the use of residential units for rental purposes to comply with approvals and conditions set by local authorities (PBT).

She said maximum occupancy limits and minimum room sizes based on floor area and building design could also be introduced, while approval from the PBT and Fire and Rescue Department should be mandatory for structural partitioning to ensure adequate emergency exits and ventilation.

Rohayu also proposed giving PBT enforcement officers inspection powers and imposing heavier penalties on premises owners who violate the requirements.

Meanwhile, real estate economics and finance expert from Universiti Teknologi Malaysia (UTM), Assoc Prof Dr Muhammad Najib Razali, said the frequency of rental increases should be regulated, particularly in urban areas facing rising living costs.

He said blanket rent control could provide short-term protection for tenants but might reduce property owners' incentive to offer rental units, affect maintenance and ultimately reduce rental supply.

"A more suitable approach is rent stabilisation and market transparency, rather than blanket rent control," he said.

Najib said rental increases could be subject to reasonable advance notice and prohibited during the tenancy period, while areas experiencing extraordinary rental pressures could be subject to a mechanism that considers market rents, inflation, maintenance costs and local conditions.

Najib, who is also a panel member of the Real Estate Research Fund Coordinating Committee (NAPREC), said New South Wales, Australia, provides an interesting comparative model, where the government does not set a single maximum rental rate for all homes but instead regulates the frequency of rent increases.

He said rental rates cannot be increased during the first 12 months of a tenancy or within 12 months of a previous increase, and landlords must provide at least 60 days' written notice.

He said a similar approach could be considered in Malaysia, with the government regulating how rents are reviewed rather than determining the rental rate for every property.

"I also see an important role for registered valuers and rental transaction data. The question is not merely what percentage rent can be increased by, but what constitutes reasonable market rental for the location and type of property.

"Without a reliable rental database, setting a national cap on rent increases risks producing a policy that does not reflect the diversity of markets in Kuala Lumpur, Johor Bahru, Penang or secondary cities," he said.

Last Monday, Housing and Local Government Minister Nga Kor Ming, when launching the DRN 2026-2035, said the ministry intended to draft and amend four laws, including three new pieces of legislation, namely the Real Estate Developers Act, Building Managers Act and Residential Tenancy Act, as well as amendments to the Strata Management Act 2013.

-- BERNAMA