When renting out property, it’s essential to have a well-prepared tenancy agreement to protect the interests of both the landlord and the tenant. However, it’s important to know that only licensed lawyers should prepare these agreements, and estate agencies offering this service for a fee are engaging in unauthorized practice of law. Here’s why this practice is not only unethical but also illegal under Malaysian law.

The Legal Framework: Section 37 of the Legal Profession Act 1976

  1. Prohibition of Unauthorized Practice: Section 37 of the Legal Profession Act 1976 explicitly prohibits individuals or entities that are not licensed legal practitioners from preparing legal documents for a fee. This includes tenancy agreements, which are legal contracts.
  2. Ensuring Professional Standards: The Act aims to ensure that all legal documents are prepared by qualified professionals who are bound by professional standards and ethics. This protects the public from receiving substandard legal services and ensures the proper administration of justice.

Why Only Lawyers Should Prepare Tenancy Agreements

  1. Legal Expertise: Lawyers have the necessary training and expertise to draft tenancy agreements that comply with current laws and regulations. This ensures that the agreement is legally sound and protects the rights of both parties.
  2. Avoiding Legal Issues: Improperly drafted tenancy agreements can lead to disputes and legal complications. Lawyers can anticipate potential issues and address them in the agreement, providing clarity and security for both landlords and tenants.
  3. Ethical Considerations: Engaging in the unauthorized practice of law is not only illegal but also unethical. Estate agencies must respect the boundaries of their professional role and refer clients to qualified lawyers for legal matters.

The Risks of Using Non-Lawyers for Tenancy Agreements

  1. Invalid Contracts: Tenancy agreements prepared by non-lawyers may not be legally enforceable. This can leave both landlords and tenants vulnerable to disputes that could have been avoided with a properly drafted agreement.
  2. Lack of Recourse: If an estate agency drafts a faulty tenancy agreement, clients have limited recourse. In contrast, lawyers are held to strict professional standards and can be held accountable for their work.
  3. Potential Penalties: Estate agencies that offer to prepare tenancy agreements for a fee risk facing legal penalties for unauthorized practice of law. This can include fines and other sanctions, which can harm their business reputation and operations.

What Estate Agencies Should Do

  1. Refer to Qualified Lawyers: Estate agencies should always refer clients to licensed lawyers for the preparation of tenancy agreements. This ensures that the agreements are legally valid and professionally prepared.
  2. Educate Clients: Inform clients about the importance of having their tenancy agreements prepared by a qualified lawyer. This transparency helps build trust and ensures that clients are aware of their legal rights and protections.
  3. Focus on Core Services: Estate agencies should focus on their core services, such as property marketing, client negotiations, and property management, while leaving legal document preparation to qualified professionals.


Estate agencies should not offer to prepare tenancy agreements for a fee, as it constitutes unauthorized practice of law under Section 37 of the Legal Profession Act 1976. Only licensed lawyers have the expertise and legal authority to draft these important documents. By referring clients to qualified lawyers, estate agencies can ensure that tenancy agreements are legally sound and protect the interests of all parties involved. This approach not only complies with the law but also upholds the highest ethical standards in the real estate profession.

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