Landlord withholds Security Deposit!

Hi all, I thought I would share my experience with a Landlord here in KL. And hopefully you may be able to avoid some of the hassles associated with leasing an apartment in Malaysia.
I recently exited an apartment at what is considered an upmarket Condominium  – and the Landlord held back the security deposit for items which were clearly wear and tear.

DISCLAIMER: This post contains general information and does not constitute Legal counsel or advice in any way, and should not be treated as such. You must not rely on the information on this post as an alternative to legal advice from your attorney or other professional legal services provider. If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider. You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this post.

Before you Occupy:
Remember with Contracts: What you sign for is what you live with! So some clauses that you should be aware of;
1.    Indemnification: Be wary of clauses that indemnify the Owner/ Landlord against negligence and wilful acts. At no time should you indemnify the Owner/ Landlord against negligence.
2.    Servicing of Equipment by Tenant: E.g. Air conditioners, be clear about what is and is not to be serviced by the Tenant and frequency of such servicing.
3.    Repairs to Equipment by Landlord: Be very specific about timeframe and choice of Company to effect repairs. It is preferable to have independent Contractor who does not collude with Agent/ Landlord to hold you liable for Repairs – Claiming that breakdown was caused by your negligence/ damage. (In my case the Landlord tried to blame me for an internal circuit-board failure!!)
4.    Minor Repairs: The Tenancy Agreement may require that the Tenant pays for Repairs up to a certain value e.g. RM250. It is important that the clause states clearly that this is only up to a maximum of RM250 – Otherwise you will be liable for the first RM250 of every repair. And this not the intent of this clause. It is only to take care of minor and incidental repairs e.g. replacing of bulbs, hoses, etc. 
5.    Entry-Inspection: It would be wise to include in the Tenancy Agreement a clause or as addition to existing clause that Entry Inspection is to be accompanied by Photos of the premises and condition thereof.
6.    Exit Inspection: This is very important! Ensure that a pre-exit inspection is written into the contract that must take place at least 2-weeks before you exit and final exit inspection to be concluded on the last day WITH a fault report provided on the day of Exit. Failure to secure this opens you up to a variety of claims for which you will not be able to defend yourself. And if you are an Expat that is leaving the Country, this could become quite problematic.
7.    Exit Requirements: Know what is required when you exit the premises – Landlord will make all kinds of claims – all new bulbs with same wattage, dry cleaning all curtains, floor polishing, etc. etc. This should be in writing and agreed to upfront in the contract/ tenancy agreement.
8.    Expat Exit Clause: This is usually on a 12 months, with two months’ notice period – this means a TOTAL of 14 months. Be aware of this requirement. You can request that it be changed to 10+2 which would mean an effective 12 months.


Entry and First 30 Days:
1.    Entry Inspection: usually the Agent/ Landlord will ask you to sign an entry inspection. And they may try to rush this process – because this is probably the single most important document in conjunction with the Tenancy Agreement.
Record EACH & EVERY scratch, dent, mark, etc. Check and inspect all  floors, walls, cupboards, equipment, table tops, tiles, balconies, windows, etc. for marks, damage and any general condition. RECORD EVERY ISSUE ON THE ENTRY-INSPECTION REPORT AND HAVE BOTH AGENT AND LANDLORD SIGN A COPY. (You will need this when you go to court!)
2.    Entry Inspection Pics: Take as many pics as possible of the condition of the Premises, e-mail these to both Agent and Landlord and request confirmation of receipt! Do not be afraid of taking as many pics as possible. My first Apartment I only took about 30 pics…..my second apartment over 200 pics. Its send a clear message to the Landlord early in the relationship that you won’t allow your deposit to be held ransom. (In my case landlord wanted to claim for deterioration of kitchen cupboards that where water-damaged before occupancy – lucky I had pics of original condition)
3.    During the term of your Tenancy DO NOT rely on WhatsApp messages for communication – even the smallest of repair or complaint needs to be in writing, preferably on mail to both Agent and Landlord. It goes without saying that all correspondence should be filed/ stored for retrieval later.

Dispute:
In the unfortunate event of a dispute arising, please contact a reputable lawyer as soon as possible and have them issue a demand letter and summons if need be. (Especially if withheld deposit value is significant)


Professional Bodies:
I have listed below some Regulatory Bodies and Boards that you may contact and what power they possess.
1.    Malaysia Small Claims Court – Will only be able to deal with matter of value less than RM5000, do have power to enforce and can be used to apply logistics pressure on Landlord if he/ she is based far from court precinct. Also useful alternative to lawyers in the event of amount withheld being less than RM5000.
2.    The Board of Valuers, Appraisers, Estate Agents and Property Managers – This body does not have any ability to enforce any decision, however can discipline Agency (not Agent) if found to be acting outside of code of conduct.
3.    Tribunal for Consumer Claims Malaysia – This body DOES handle disputes where the Security Deposit is withheld unreasonably and does have power to enforce in that they can attach property of the Landlord. This is a very worthwhile route, however do be advised that they only handle matters between private individuals up to a maximum value of RM25k. (They do not handle such cases for or involving companies/ organisations)

I hope the above shared information from my experiences with Rentals save you from the unscrupulous actions of some Landlords.
Unfortunately it seems as if there is a tendency to withhold deposits on frivolous grounds in the hope that the Tenant will not challenge the Landlord.

Take care
Mohamed

Although not entirely ethical, it is also possible to stop paying the monthly rent two months before leaving or the lease is expiring. Breaking a contract even with an expat/diplomatic clause usually costs the deposit.

There is a small claims court (for amounts under RM5000) where it may be possible to argue that the wear and tear was less than the full security deposit as the owner would have to show expenses to make the "repairs". There is no legal representation required and often just the threat of legal action can soften the mean owner or dishonest agent.

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