Standard procedures & GUIDES for renting of property in PENANG, Malaysia

After you have found a property of interest, the next step is to understand the process for renting the property. The following are basic steps that a tenant follows when renting property in Malaysia Penang :


STEP 1
To pay one (1) month earnest deposit on letter of offer / acceptance.
This is the booking deposit and the amount is usually equivalent to one month's rent. After the landlord signed the Letter of Intent and accept this deposit, he cannot rent the said property to any other party. This deposit will become part of the security deposit or advance rental after the legal Tenancy Agreement is signed.

STEP 2
Within 14 days from date of acceptance both parties signs the Tenancy Agreement. Upon signing the tenant to pays up balance:-
1) Security deposit : One month's deposit for every year of lease. 2 months deposit for furnished unit
2) Utilities deposit. ( For water and electric deposit )
3) Gov't stamp duty and agreement fees. (preparing of contract and attending to stamping at Inland revenue stamp office)
Upon full payment, Tenant receives keys and take possession of property.

STEP 3
The Tenancy Agreement is sent to stamp office for stamping. Landlord & tenant receives the stamped copy of the agreement.
The Tenancy Agreement will have to be stamped by the Inland Revenue Authority of Malaysia. Only after the Tenancy has been stamped then it becomes a valid legal document. This is to protect the interest of both contracting parties.
When the lease term ends, the security deposit will then be refunded without interest. However, the landlord reserves the right to deduct from the deposit all costs, damages and expenses arising from the tenant for breaching any of the covenants stated in the Tenancy Agreement.

The stamp duty is usually borne by the tenant or shared between the landlord and tenant and computed as follows:- 

Below is the calculation of stamp duty.