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Malaysian Approach on Tenants – Non Performing Rental Properties & Tenants

Posted by teamhidup on 2016-09-23
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Author : The Mee Pho

The scenario of room renting in countries like Malaysia and Indonesia might differ slightly compared to other countries like in Australia or United Kingdom but what’s common is non performing rental properties. It is really common here in Malaysia that a landlord rent out his property to students without a specific contract prior to it’s tenancy. For example, Mr. Chua (random name) agrees to rent his house to college students and appoints one person – Ah Boy (head of the house) to collect the monthly rental from each and everyone and pay Mr. Chua on an agreed date every start of the month. In total, there are 12 students including Ah Boy who’s renting the house. Well basically you can’t really have 12 names in a single contract, that’s really odd – is there anything as such? Alternatively what landlords would normally do is to draft contracts for each and every one of the 12 people who lives there. Basically when Ah Boy rented the house from Mr. Chua, the amount is divided fairly between the rest of his housemates – RM150 each to make things simpler.

Here’s the deal, we’re Malaysian, embrace it, we like things to be easy, yes? You stay there 20 people also can, at the end of the month you pay RM1,800. How you wanna live there you kawtim with your friends, I don’t care. Hey don’t lie, there are a lot of landlords who do that. Another scenario is that you would want to maximize profit, you charge per head. Regardless, in both scenarios, a lot of tenants in this case would appoint one person to collect for us. See, the problem with this is that it is not as easy as we think. How many times have we been wronged? Let’s take one simple example.

Rent the house – Bluff the Landlord – Room renting issue

The date comes where Mr. Chua comes to collect the money/the money should have been transferred to his account – but he did not receive it. Mr. Chua calls Ah boy and asks for the money – Ah boy quickly responded, Mr. Chua, can we get 2 days extension, there are a few more people who haven’t paid yet. Two days later, Mr. Chua calls again, Ah boy said, Mr. Chua, I’m terribly sorry but I had to use the money to help my dad, he met with a terrible accident. Mr. Chua went to the house, met with Ah Boy and the rest to inform them on the tragic circumstance and that he had to deduct some amount out of the deposit to cover for the month. Ah boy here, did not tell anyone about this until Mr. Chua came to the house and informed everyone. So the rest of the crew went to visit Ah Boy’s dad – and hey you know what – Ah Boy’s dad was just fine drinking green tea in the porch. TRUE STORY BRO – Mr. Chua has just been Gotcha’d.

Mr. Chua was really pissed. He decided not to renew the contract with them ( yes there’s a contract – a tenancy agreement under Ah Boy’s name ). So months later, new tenant came in. Same story different method. Ah Chuan here, the new head of the house informed Mr. Chua that the money was stolen and that he had kept the money safe in his locker but someone stole it. At this point any wise person would’ve figured that appointing a head of the house which is trustworthy is a daunting task and that he can’t take this any longer. So how would you advise Mr. Chua?

Mr. Chua, stop renting your house, you’re bad at managing.

No we’re joking. The reality is that these scenario is very common here. If I were Mr. Chua I would pity those who had nothing to do with the mischief that Ah boy or Ah Chuan had done and at the end of the day forcing Mr. Chua to evict everyone from the house, or in other words kick them all out. Which is sad. Many would’ve understand that what Mr. Chua had intended was to help these students but the abused it. These being said, what can landlords like Mr. Chua do beforehand to avoid this? Here are some quick tips.

Clear method of payment on room renting

It is actually easier that Mr. Chua had just charged per head on rooms instead of assigning Head of House. What he can do in this scenario is ask each and everyone to make their own payment respectively ( age of technology, bank transfer or cash deposit is way quicker ) – keep the receipt as well. This way, Mr. Chua can easily check and confirm who among the tenant who hasn’t paid yet. Mr. Chua can be strict on this and warn those who has very bad track record on payment before asking them to leave. To be honest, it’s really easier to rent rooms to people with various backgrounds instead of relying on one person to gather 10 more people or housemates to fill up the rooms in the house. Trust too much – they’ll be all over your head.

Fair amount of deposit

Landlords would normally take a 2 + 1 Deposit. Which means a two months deposit and 1 month advance payment. Normally students would ask for a 1 + 1 instead and typically landlords would agree. The problem with 1 + 1 is that there is a very high tendency that they default on one month’s payment and they do not pay the last month of stay’s payment. For example, Ah Boy had defaulted September’s payment, told Mr. Chua that he would double the amount of payment for November to cover for September, but left without paying on his last month which is November (when the semester ends). Mr. Chua loses again.

Compromise but never complacent

There are instances where Mr. Chua could compromise like if there’s an emergency; especially death in family, medical reasons and etc. But never to be complacent and clarify to tenants on the reasons as to why you would give them extension on the payment. This is why it is important for Mr. Chua to set the terms clearly before the tenancy starts.  Tenancy works both ways and involve 2 or more parties. Period.

 

Mr. Chua is a fictional character but the stories are mostly true. If you’re Ah Boy and Ah Chuan, sorry. 😛