Who Should Foot The Bill For The Repair Works In A Rental Property?



Home is a place where we seek solace and comfort. However, this is not the case for many tenants whose rented property is instead a host of problems, and the landlord is not cooperative. After all, one of the most disputed areas in tenancy agreements centres on the non-performance of one’s obligations, especially with regards to the repair works of a rental property.


In this article, the respective obligations of the landlord and tenant to repair and maintain the rented property in a tenancy shall be discussed.


In Malaysia, there are various acts which may be applicable to different areas of tenancy disputes such as:


Contracts Act 1950: tenancy agreement conflicts;

Distress Act 1951: matters on eviction;

Civil Law Act 1956: disputes on payment;

National Land Code 1965: registration of titles relating to land, land tenure, transfer of land, easements leases and chargers in respect to land and other rights and interests in land;

Common law and Malaysian Case law: rental disputes and non-performance of statutory/ contractual obligations.[1]


The first point to determine is whether the rental is a tenancy or a license, as the legal obligations assigned to each of these forms of contract are different. Although a tenancy and a license are used interchangeably in our daily conversations, both terms have different definitions in the legal sense.


Below are the general differences between a tenancy and license:



Tenancy


Currently, there are no specific statutes which govern the relationship between landlords and tenants. Thus, obligations of the parties would vary depending on the terms of the tenancy agreements.


In most tenancy agreements, the responsibility of keeping the rental property in tenantable condition would be assigned to the landlord by requiring them to keep main fixtures such as roof, main walls, main drains and any common passages in tenantable repair condition.[7] On the other hand, tenants will be required to keep the rental premises fit for tenancy purposes except for the aforementioned fixtures in which responsibilities have been assigned to the landlord.[8] These include fittings which are temporary structures and are not a fixed part of the building such as screws, nails, paintings and pots.


Any repair work done by the parties generally does not require improvement of the fixture or fittings in question.[9] However, there are instances where the condition of a main fixture is beyond repair and requires renewal. For example, a leaking roof which had been in a bad condition since the commencement of the rental and could not be repaired further,[10] or the replacement of a rotten floor.[11] Under such circumstances, such renewal would fairly fall within the description of ‘repairs’.


In general, any repair works done (be it by the landlord or the tenant) must be reasonable as to how an owner would be expected to keep his property’.[12] In other words, there is no need for the structure in repair to be in a better state than it was at the commencement of the rental.[13]


License


A license is a mere permission for licensee to use or to be on a land/ property as provided in Black's Law Dictionary.[14] There are no rights and/or interest of the land conferred onto the licensee. As such, any repair obligations that arose during the course of a license would merely be contractual as there are no statutes which govern the parties responsibilities under a license.


Currently, there is no requirement for tenancies and licenses to be registered. This has resulted in ambiguity on the type of occupation one may have. It is common for the purported landlord to take advantage of this ambiguity and deny the existence of a tenancy by claiming that the occupier merely has a license in order to recover possession of the property without an order of the Court in the event of a breach.[15]


However, there are certain factors which may cause a license to have the legal effect of a tenancy. Although there is no hard and fast rule to distinguish them, the contributory factors of a tenancy have been observed to be as follows but not limited to[16]:

● Having complete control over the premises (i.e. whether the other party retains the right to re-enter and remove the occupiers) ;

● Being subjected to rent control;

● Intention of creating a tenancy displayed in their agreement in the form of writing or orally (i.e. indicating whether the agreement is subjected to the Control of Rent (Repeal) Act 1997); and

● Longer length of stay.[17]


As a general rule, anything that falls short of a tenancy would be deemed as a license[18] unless registered. A conventional example of a license is an Airbnb occupation where there are house rules or restrictions on the use of premises which may be imposed upon by the licensor. Although the occupier/licensee enjoys exclusive enjoyment of the premises, this is not the same as having complete control as he does not have the right to manage their own use of the premises.[19]


Remedies for Landlord/ Licensor


In the event of a breach of a repair obligation, the landlord/ licensor of the property could sue for a breach of agreement for non-performance for repair obligations for compensation or specific performance.[20]


Remedies for Tenant/ Licensee



The lack of specific laws governing landlord-tenant relationships means that obligations are left to be decided amongst the parties who are not level in bargaining power. It is important to ensure that the tenancy agreements entered into provide sufficient clarity for both parties in order to avoid any unnecessary disputes. As our current laws governing tenancy agreements are limited, we welcome the incoming Residential Tenancy Act,[23] which aims to provide more clarity on the law of tenancy agreements.


For any further queries regarding your tenancy agreement, feel free to contact us for a professional preliminary consultation.

[1] See Esso Malaysia Bhd V Hills Agency (M) Sdn Bhd & Ors [1994] 1 MLJ 740 and Innab Salil & Ors v Verve Suites Mont’ Kiara Management Corporation [2020] MLJU 1563 [2] Innab Salil & Ors v Verve Suites Mont’ Kiara Management Corporation [2020] MLJU 1563; Section 213(1) and (2) of National Land Code 1965 on the exemption of registration and creation of tenancies [3] Ibid. at 1069 [4] Section 213(1)(a) [5] Section 223(1)(c) National Land Code [6] Section 213(1)(a) National Land Code [7] Nicholas Ng Chan Hooi v Segi College (Pg) Sdn Bhd [2018] MLJU 963 at [12] [8] Nicholas Ng Chan Hooi v Segi College (Pg) Sdn Bhd [2018] MLJU 963 [9] Klasse Department Store Sdn Bhd v Central Development Shn Bhd [1990] 3 MLJ 14 at [2] [10] Ibid. [11] Klasse Department Store Sdn Bhd v Central Development Shn Bhd [1990] 3 MLJ 14 at 22 [12] Section 5 National Land Code 1966 [13] Section 233(b) National Land Code 1966 [14] Henry Campbell Black, Black's Law Dictionary (4th edn, West Publishing Co 1968) 1069 [15] Esso Malaysia Bhd v Hills Agency (M) Sdn Bhd & Ors [1994] 1 MLJ 740; Innab Salil & Ors v Verve Suites Mont’ Kiara Management Corporation [2020] MLJU 1563 [16] Innab Salil & Ors v Verve Suites Mont’ Kiara Management Corporation [2020] MLJU 1563 at para [83] [17] Ibid. para [111] [18] Pong Khee Kwei v Tan Sai Kuy [1972] 2 MLJ 48 at 52 [19] Ibid. para [107] [20] Section 4(b) &(d) and Section 3(a) Specific Relief Act 1950; Esso Malaysia Bhd V Hills Agency (M) Sdn Bhd & Ors [1994] 1 MLJ 740 [21] Ibid. [22] Ibid; Esso Malaysia Bhd V Hills Agency (M) Sdn Bhd & Ors [1994] 1 MLJ 740 [23] What Is The Upcoming Residential Tenancy Act All About? (iProperty, 11 March 2021) <https://www.propertyguru.com.my/property-guides/what-is-the-upcoming-residential-tenancy-act-all-about-44122> accessed 3 January 2022


Authored by Celinne Teh and Caylene On


Kindly note that this legal article does not, and is not intended to, constitute formal legal advice by the Firm, instead all information, content and materials available on this site are for general informational purposes only. If readers require further clarification or legal advice, please email office@kevinwuassociates.com.