Residential Lease: Must-Have Clauses in Malaysia

The anatomy of a tenancy agreement that protects both sides

Landlords and tenants often start their relationship with verbal promises. Months later, disputes arise over rent increases, repairs, or premature move-outs. A well-crafted tenancy agreement prevents these situations by documenting every expectation in writing. Malaysian tenancy law is evolving—state tribunals and proposed Tenancy Acts aim to standardise practices—so it is even more important to keep your paperwork up to date.

This guide walks through the clauses that should appear in every residential lease, whether you manage a high-rise unit in Kuala Lumpur or a terrace house in Penang.

Deposit and payment structure

• Security deposit – usually one month’s rent, held to cover damage beyond fair wear and tear.
• Utility deposit – typically half a month’s rent to cover outstanding bills.
• Advance rent – some landlords collect the first month’s rent upfront on signing.

State clearly how deposits are stored, when they will be returned, and what deductions are allowed. Always issue receipts and keep funds in a separate account so you can refund promptly.

Maintenance, repairs, and inspections

Clarify which party handles routine servicing (air-conditioners, pest control) versus structural repairs (roof leaks, wiring, plumbing). Provide a process for reporting defects and a timeline for response. Include rights to conduct periodic inspections with reasonable notice.

Tip: attach an inspection checklist and photo inventory so the property condition is documented at move-in and move-out.

Utilities and shared facilities

Outline who pays for electricity, water, sewerage, internet, and sinking fund contributions. If the property is part of a strata development, include the building’s house rules as a schedule. Clarify guest policies, access card deposits, and penalties for misuse of facilities.

Termination, renewal, and holdover

State the notice period required from either party, penalties for early termination, and any options to renew. For example, a 24-month lease might allow termination after 12 months with two months’ notice plus forfeiture of deposit. Specify whether the tenant may stay on a month-to-month basis if the lease expires without renewal.

Insurance and liability

Encourage tenants to obtain renter’s insurance covering personal belongings. Landlords should maintain building insurance for structural damage. Include indemnity clauses so neither party is responsible for losses caused by the other’s negligence.

Digital workflows make tenancy management painless

Legalise AI automates repetitive paperwork:

1. Generate lease templates customised for each property profile.
2. Create renewal letters, inspection reports, and rent increase notices in seconds.
3. Store signed agreements with automated reminders for upcoming expiries.

Ready to modernise your leasing workflow? Start with the Residential Lease Template and invite tenants to review terms securely online.