Under Malaysian law, the Land Code of 1965 rarely mentions tenancy, so we do not have a complete set of tenancy ordinances,
nor do we have a statutory standard lease.
We do not recommend that landlords and tenants casually copy the standard lease online
After all, there is no standard lease can hit the world, both sides must consider each lease has its own attention.

When drawing up any
lease,

the parties must first determine whether the lease is more than
three years old,
and a lease of more than three years is generally called lease, and under the Land Code of 1965, a lease for more than three years will give the tenant the right to register their interest in the landlord’s title (endorsement), known as Form 15A.
lease generally does not exceed 99 years. If part of the land is involved, it will not exceed 30 years.
The process of registration and return of lease will be subject to the Land Code.

The basic terms of a lease The basic terms

of a lease are common as follows:

1. Location;
2. The purpose of the lease;
3. The start and end dates of the lease;
4. Rent;
5. Rent security;
6. Water and electricity margin.

As for other matters, the relationship between the landlord and the tenant is left to the parties to

negotiate freely, and as to how the parties
should negotiate is subject to the Contract Act 1950
(Contract Act 1950), all obligations and terms are in accordance with the principle of freedom of contract under the Contract Law (Freedom of Contract), i.e. the parties are free to enter into contract terms within the limits of the law, as long as their contents do not violate laws and regulations and the public interest, the law recognizes its validity. In most
cases,
unequal terms often appear because the negotiating chips of the two sides are different (unequal bargaining of often).


Malaysia does not have a treaty act to prevent inequality, as the UK did,
and similar
laws usually appear only under the Consumer Protection Act 1999, but the relationship between landlords and tenants does not fall within the jurisdiction of the Consumer Protection Act.
Therefore, some people say that landlords and tenants who have a dispute can complain about the Department of Trade and Consumer is actually wrong.

Potential risks, responsibilities and exit mechanisms

So do you have any of the following potential risks when developing a contract?

1. Is it the landlord who signed the lease? If not, does he have the right to sign a contract?
2. Where is the landlord’s responsibility and what is the landlord’s maintenance responsibility?
3. Does the tenant have the right to renovate or repair it?
4. Who opens the account for the hydrometer? What should I do if I am in arrears?
5. What costs must be borne by the landlord, such as land tax, house tax, fire insurance?
6. Is the tenant liable for management fees?
7. Where is the tenant’s power?
8. Can you sublet enough? Can you be a second landlord?
9. Does the landlord need to notify the rental room to be resold to a third party?
10. In the event of a major disaster, who will bear the cost of repairing the house?
11. Do the parties have the power to withdraw from the contract early?
12. When the tenant withdraws from the contract, do you need to restore the decoration?
13. What happens if rent is delayed?
14. If rent arrears are owed, can the landlord come directly to replace the lock or move the tenant’s personal belongings?

Maintenance liability

Under the Common law, if the matter of maintenance relates to the structural nature of the house, it is generally the responsibility of the landlord.
Because any structural problem of a house can indirectly affect the value of the house, only the landlord can benefit from it. If the maintenance matter
is a consumption nature, such as changing the light bulb, generally will not have much impact on the value of the house, tenants can repair their own.
Therefore, if the tenant is asked to undertake any maintenance related to the structure, it is not legally reasonable.

Margin
In general, landlords charge tenants a margin
to ensure that the tenant fulfills their contractual responsibilities, usually divided into a margin of rent and a deposit for utilities.
In particular, when the
lease has ended, the tenant must restore the house to its good condition according to the lease.
In case of serious damage
or arrears
of water and electricity, the landlord has the right to withhold or deduct the security deposit so that he can compensate the landlord. The deposit will generally state that the
tenant may not use the deposit as rent unless the landlord personally agrees.

Stamp duty

So what exactly does a lease need to pay stamp duty?
Under Malaysia’s Evidence Act 1950 (Evidence
Act 1950),
any document requiring submission to the court as evidence must be paid under the Stamp Duty Act 1949 if there is a dispute between the landlord and the tenant and must be brought before the court for trial.
If stamp duty has not been paid
or the amount set by the Act has not been met, the document will not be admitted to the court as evidence.
Therefore, if the lease for stamp duty is not paid, it does not mean that the lease is
illegal.
However, if the parties must rely
on the lease as evidence, the parties must pay stamp duty and a late fine (penalty)
before the lease can be admitted as evidence in court.
Lawyers encourage both parties to draw up contracts that
must be handed over to the Customs Office to protect their rights and interests from time to time.

Unpaid rent If the tenant owes rent, the landlord may apply to the court under the Detention Act 1951 to enter the house and seize the tenant’s personal belongings for auction.

But if the tenant does not leave, the landlord must apply
to court for an eviction order under the Specific Relief Act 1950 to evict the tenant.
Landlords who change locks or lock tenants in their homes without permission may be sued for false imprisonment.

In summary, the lease may seem simple,
but there is a lot of learning involved, and both parties must carefully draw up the terms and things of the lease.
It is suggested that you may ask your lawyer to set out all the terms to prevent unnecessary disputes and infringement of your rights and interests.

Real Property Gain Tax, or RPGT, or Cukai Keuntungan Harta Tanah, is a tax levied by the LHDN on the capital gains of its citizens.

The act was first introduced in 1976 under Real Property Gains Tax Act 1976 as a way for the government to limit property speculation and prevent a potential bubble or speculation occurs when investors ‘speculate’ to earn huge profits by buying low, and selling high – making a large return on their investment

Beyond this, RPGT Malaysia is a significant source of revenue for the government, with the earnings used for national development. As such, rates fluctuate depending on the economic needs of the country.

Who need to pay?

RPGT is chargeable on seller who disposed a real property.

How much I need to pay?

The RPGT is chargeable on the profit between your buying and selling price stated on your previous and current Sale and Purchase Agreement.

what is the applicable tax rate?

1. Individuals (Malaysian Citizens)

30% on the profit in the first year of disposal
30% on the profit in the second year of disposal
30% on the profit in the third year of disposal
20% on the profit in the fourth year of disposal
15% on the profit in the fifth year of disposal
0% out of sale in the sixth year of disposal or more

2. Individuals (non-citizens and foreigners)

30% on the profit in the first year of disposal
30% on the profit in the second year of disposal
30% on the profit in the third year of disposal
30% on the profit in the fourth year of disposal
30% on the profit in the fifth year of disposal
10% on the profit in the sixth year of disposal or more

3. Company

30% on the profit in the first year of disposal
30% on the profit in the second year of disposal
30% on the profit in the third year of disposal
30% on the profit in the fourth year of disposal
30% on the profit in the fifth year of disposal
10% on the profit in the sixth year of disposal or more

• Exemption on gains when a property is transferred within the family, either between husband and wife, parent and child, or grandparent and grandchild. Transfer between siblings is excluded. 
• Exemption on gains when a property is acquired from death the deceased by probate or letters of administration.
•  RPGT payable if the disposal of the property is made by the beneficiaries within 5 years from the date of death of the deceased

When to submit?

• The seller need to file tax return in form CKHT 1A within 60 days of date of signing of Sale and Purchase Agreement by reporting the profit they earn.
• Form CKHT 3 shall be filed if there is no profit
• The sellers have the right to apply an exemption (once in a lifetime) or tax relief by submitting receipts on renovation fees, lawyer’s fees, brokerage fees for a tax deduction
• In the event there is profit, the purchaser lawyer has the right to retain 3% of the purchase price (foreigner 7%) as a retention sum to Inland Revenue by filing CKHT 502 for a assessment of tax.
• Any excess will be refunded to seller but need to top up if there is any shortfall.
• The seller may opt to file the necessary forms with the Inland Revenue Board individually or seek assistance from the solicitors at a fee prescribed by the Solicitors Remuneration Order 2006.

What is the consequences of late payment?

Any payment or submission of documents after 60 days may attract a penalty payable by the seller. The penalty is additional 10% of the amount payable as RPGT. In worst case, the seller may also face the problem of travel restrictions.

often, the seller would have mistaken idea that the purchaser (buyer)’s solicitor is representing him in the sale and purchase agreement. In reality, the lawyer is acting only for the buyer and not the seller.

Prime Minister Muhyiddin announced the short-term economic recovery plan (PENJANA) through live TV on June 5, 2020:-

1. Home Ownership Movement
   ​
   ​Houses priced from RM300,000 to RM2.5 million will be exempt from stamp duty on transfer documents and loan agreements.
   He said that this exemption is valid for the sale and purchase agreement signed from June 1, 2020 to May 31, 2021, and the condition is that the developer will give at least a 10% discount.
   However, this discount does not apply to second-hand housing sales.
2. Exemption from industrial profit tax

       Malaysian citizens who sell their homes from June 1, 2020 to December 31, 2021,
        will be able toExempt Industry Profit Tax.
       And this offer is limited to the sale of 3 houses per person.

• Purchase the third house
  The purchase of the third and subsequent housing loan financing with a value of more than RM600,000 is no longer limited to housing 70% of the price is based on the internal risk management of financial institutions.

Foreclosure before auction begins

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. A mortgage lender (mortgagee), or other lienholder, obtains a termination of a mortgage borrower (mortgagor)’s equitable right of redemption, either by court order or by operation of law (after following a specific statutory procedure).

In the Malaysia context, the mortagagee’s right of foreclosure in enunciated by Order 83 of the Rules of Court 2012 & S.256 & 257 of the National Land Code 1965:-

Order 83 Charge Action

(1) This Order applies to any action (whether begun by writ or originating summons) by a chargee or chargor or by any person having the right to foreclose or redeem any charge, being an action in which there is a claim for any of the following reliefs:
(a) payment of moneys secured by the charge;
(b) sale of the charged property;
(c) foreclosure;
(d) delivery of possession (whether before or after foreclosure or without foreclosure) to the chargee by the chargor or by any other person who is or is alleged to be in possession of the property;
(e) redemption;
(f) reconveyance of the property or its release from the security;
(g) delivery of possession by the chargee.

S.257 Matters to be dealt with by order for sale.

(1) Every order for sale made by the Court under section 256 be in Form 16H and shall-
(a) provide for the sale to be by public auction;
(b) require the sale to be held on, or as soon as may be after, a date specified therein, being a date not less than one month after the date on which the order is made;
(c) specify the total amount due to the chargee at the date on which the date on which the order is made;
(d) required the Registrar of the Court to fix a reserve price for the purpose of the sale, being a price equal to the estimated market value of the land or lease in question;
(e) specify that no bidder shall be allowed to bid in the sale unless the officer of the Court is satisfied that the bidder possesses, at the time of the sale, the sum equivalent to ten per centum of the reserve price specified under paragraph(d) ;
(f) specify that where the full amount of the purchase price is not paid after the fall of the hammer by the successful bidder, the sum specified in paragraph (e) shall be paid as deposit to the chargee and forthwith credited into the account of the chargor pending the settlement of the balance of the purchase price;
(g) specify that the balance of the purchase price shall be settled on a date not later than one hundred and twenty days from the date of the sale and that there shall be no extension of the period so specified; and
(h) specify that where the balance of the purchase price is not settled on a date specified under paragraph (g), the sum paid as deposit under paragraph (f) to the chargee shall be forfeited and disposed of in the manner specified under section 267A

Types of auction

A property with title issued will be auction off by public action in court (Judicial Auction/High Court Auction),
whereas a property without title issued such as newly constructed apartments, will be auction off through private auction (Non-judicial Auction/Bank Auction/LACA Auction).

Auction day

The bidders must be at 18 years old or above before qualified for the bidding process. Before the auction begins, a check or bank draft of 10% deposit must be placed in court before the auction begins. Please refer to https://elelong.kehakiman for the qualifications of bidders and the bidding process. gov.my/BidderWeb/Home/Terms. for the complete guide on bidding process
*Foreigners will not be eligible unless approved by the state government.

Beware of Proclamation of Sale.

It is also imperative for the bidders to check on the Proclamation (Conditions) of Sale before bidding. These Conditions of Sale are always available before the auction takes place. An individual bidder at the auction ought to obtain and familiarise himself with these terms and conditions before the bid. This is because if the bid is successful, he will be deemed to have entered into a contract on those terms.

An example of a clause in a Condition of Sale which illustrates the risks a bidder must assume when he purchases a property, reads as follows:

“The property is sold on an ‘as is where is’ basis without vacant possession subject to (a) all express and/or implied conditions, restriction–in–interest affecting the Master Land and that which may be imposed/endorsed on the document of individual strata title to the property upon the issuance thereof, (b) all easements, covenants, charges, caveats, liabilities, (including but not limited to liabilities to the local authorities incurred but not ascertained and any rates made but not demanded) and any adverse claims in respect of the Property; and (c) all tenancies, lease, occupiers and rights (if any) of any tenant or occupier, subsisting thereon or therefore without any obligations arising to define the same respectively.”

An example of a Condition of Sale which exonerates the seller from handing over the property with vacant possession has a clause which reads as follows:

“The successful purchaser shall at his own costs and expense take possession of the property after the payment of the balance purchase price. The assignee/lender or its agents have no obligation to deliver vacant possession of the property and the successful purchaser is prohibited from entering the property before the payment of the balance of purchase price and/or late payment interest.”

It is a common and acceptable practice to purchase a property subject to express and implied restrictions endorsed on the document of title. But if there are tenants on the land, the bidder has to take the responsibility of evicting them and bear the costs incurred with the added risk that compensation may not be recoverable. The same would apply in the case of a need to have a caveat removed.
 

It would be in the interest of the bidder to visit the property and inspect it to familiarise himself with the condition of the property. The photographs in the newspaper or leaflet may not convey the real state of the property which the bidder expects to acquire. It must be said that a valuable property may well be acquired at an auction. However, there is a need to make adequate inquiries and investigations, and consider all the factors in order to end up with a good bargain.

Do check with the outstanding quit rent, assessment and maintenance as well. There are certain limits that the bank would cover such arrears or might not cover at all.

Memorandum of Contract: Payment within 120 days

A successful bidder would have to sign a Memorandum of Contract and pay the balance purchase price within 120 days, failing which the bank has the right to forfeit 10% deposit.

Restriction of interest

Unlike in a private auction (LACA) where the successful bidder is required to obtain consent to transfer where there is restriction in interest on the title, consent to transfer is not required for auction properties by the High Court or Land Office pursuant to Section 301 of the National Land Code 1965.

S.301 When an instrument is fit for registration.

An instrument shall be fit for registration under this Part if, but only if, the following conditions are satisfied:-
…….
Provided that where a certificate of sale has been given to a purchaser in respect of any charged land or lease under sub-section (3) of section 259 or sub-section (4) of section 265, any requirement to obtain the consent of the State Authority relating to the restriction in interest to such land or lease in question shall not be applicable.

Certificate of Sale (Form 16F)

Deed of Assignment

S.259 Procedure at sale.

(3) The purchaser at the sale shall, upon payment to the said officer of the full amount of the purchase price, be entitled to receive from him-
(a) a certificate in Form 16F that the land or lease in question has been sold to him under the authority of this Act (which certificate shall, as provided by section 267, be registrable by the provided by section 267, be registable by the purchaser as if it were an instrument of dealing); and
(b) if deposited with the Court pursuant to paragraph (b) of sub-section (2) of section 258, the issue document of title to the land or, as the case may be, duplicate lease.

In a LACA auction context, a deed of assignment shall be signed once purchase price has been paid.

Legal fees

The legal fees  and stamp duty payable will be subject to current market value of the property, which is no difference when you are buying a house.