The National Housing Policy (DRN) 2026-2035 has sparked fresh debate about the need for comprehensive tenant protections in Malaysia, with academic experts arguing that a new Residential Tenancy Act could fundamentally reshape the relationship between landlords and renters. Rather than simply favouring one party over another, the proposed legislation aims to establish clear, enforceable frameworks that define mutual obligations and create pathways for fair dispute resolution—a departure from the current patchwork of ad-hoc arrangements and informal agreements that characterise Malaysia's rental landscape.
Universiti Teknologi MARA's Associate Professor Dr Rohayu Abdul Majid emphasises that a standard tenancy agreement template would address longstanding sources of conflict in the sector. Such a framework would codify essential provisions including lease duration, deposit requirements, rental pricing, maintenance responsibilities, utility payment obligations, notice periods for contract termination and conditions for lease renewal. By moving away from bespoke arrangements negotiated without guidance, standardised agreements could reduce disputes arising from misunderstanding or ambiguous clauses that currently plague the Malaysian rental market, particularly in urban centres where demand for affordable housing remains intense.
The distribution of maintenance liability represents a critical element of any such legislation. Under the proposed framework, landlords would retain responsibility for structural integrity, fundamental systems such as plumbing and electrical installations, and damage unrelated to tenant conduct. Conversely, tenants would bear liability for deterioration stemming from careless use or deliberate misuse. This allocation reflects international best practice and acknowledges that property owners cannot reasonably expect tenants to fund major repairs, whilst simultaneously protecting landlords' investments from tenant negligence. The clarity this provides benefits both parties, as it eliminates uncertainty about who funds repairs following particular types of damage.
A cornerstone innovation involves establishing a Residential Tenancy Tribunal designed to expedite dispute resolution without imposing the delays and costs associated with court proceedings. Such tribunals have proven effective across Commonwealth jurisdictions, offering accessible venues for adjudicating common disagreements over security deposit refunds and rental arrears. By creating this specialised pathway, the Act would reduce the burden on Malaysia's already strained court system whilst providing ordinary renters and modest property owners with affordable mechanisms for recovering owed sums or securing refunds. The tribunal approach also democratises justice, as it removes financial barriers that deter lower-income tenants from asserting their rights.
A centralised deposit escrow system would constitute another significant safeguard, placing all security deposits in neutral third-party accounts under regulatory oversight rather than in landlords' personal accounts. This arrangement prevents landlords from treating deposits as additional income or applying improper deductions, whilst protecting deposits from landlords' personal creditors in insolvency situations. The mechanism would also mandate that legitimate deductions—for genuine damage or unpaid rent—be itemised and justified, with deposits returned within specified timeframes. For tenants moving between multiple rental properties or transient urban workers, such protections reduce the risk of permanently losing savings consumed by disputes over deposit refunds.
Eviction safeguards within the proposed Act would establish formal procedures preventing landlords from unilaterally locking tenants out or cutting utilities—practices that, whilst illegal in principle, persist in Malaysia's informal rental sector. Simultaneously, the framework would permit landlords reasonable access for inspections and necessary repairs through advance notice, with emergency exceptions for urgent repairs or safety concerns. This balance recognises that properties require maintenance whilst preventing arbitrary harassment. Clear eviction procedures would further protect tenants from sudden displacement whilst providing landlords with predictable timeframes and mechanisms for recovering properties from non-paying occupants.
The phenomenon of 'bird's nest houses'—residential units subdivided into numerous small rooms to maximise rental yield—has emerged as a particular concern, concentrating vulnerable populations in crowded, inadequately serviced accommodation. Dr Rohayu proposes that the Act mandate local authority (PBT) approval for any structural modifications, coupled with enforceable standards for occupancy density and minimum room dimensions. Approval from both the PBT and Fire and Rescue Department would become mandatory before partitioning, ensuring adequate emergency exits and ventilation. Strengthening enforcement powers through heavier penalties would create meaningful deterrents against circumventing regulations, addressing a significant housing quality issue that current law struggles to control.
Utm's Associate Professor Dr Muhammad Najib Razali injects a crucial economic perspective into the debate, cautioning against blanket rent controls despite their apparent appeal to cost-burdened tenants. Historical evidence from jurisdictions worldwide demonstrates that rigid price ceilings discourage landlords from offering rental units or investing in maintenance, ultimately constricting supply and exacerbating housing shortages. Instead, Najib advocates rent stabilisation combined with transparent market data, permitting modest, predictable increases subject to advance notice whilst preventing mid-lease surprises. This approach preserves landlords' motivation to maintain properties and supply rental stock whilst delivering tenants the certainty needed for financial planning.
New South Wales, Australia, provides an instructive model that Najib highlights: rather than dictating actual rental rates, the government restricts the frequency of increases. In that jurisdiction, rent cannot rise during the initial 12 months of a tenancy or within 12 months of a previous increase, and landlords must provide at least 60 days' written notice. Implementing comparable restrictions in Malaysia would allow organic market pricing whilst preventing disruptive frequent escalations. However, Najib emphasises that reasonable rent levels depend entirely upon robust rental transaction data and valuations reflecting local variations. Setting national caps without comprehensive market information risks creating policies that misfit the dramatic differences between Kuala Lumpur's tight market, Johor Bahru's industrial-focused demand, Penang's mixed dynamics and secondary cities' entirely different conditions.
The absence of centralised rental data represents a fundamental obstacle to evidence-based policy formulation. Without registered valuers systematically recording rental transactions and housing characteristics, policymakers operate largely blind when attempting to define what constitutes reasonable market rent in any given location. The challenge transcends merely determining permissible percentage increases; it encompasses understanding local supply-demand dynamics, property-type variations and genuine affordability metrics. This data gap undermines both blanket regulatory approaches and granular market-responsive policies, suggesting that any Residential Tenancy Act should mandate establishing comprehensive rental registries alongside substantive tenant and landlord protections.
Housing and Local Government Minister Nga Kor Ming's July announcement of the ministry's intention to draft four pieces of legislation—including the proposed Residential Tenancy Act alongside the Real Estate Developers Act, Building Managers Act, and amendments to the Strata Management Act 2013—signals comprehensive legislative reform addressing long-neglected property sector governance. The Residential Tenancy Act would constitute the cornerstone, establishing the foundational relationship framework that subsequent regulations would build upon. For Malaysian renters confronting informal arrangements, arbitrary evictions and unprotected deposits, and for conscientious property owners seeking transparent operating frameworks, this legislative initiative represents overdue recognition that housing markets function more efficiently and equitably when clear legal guardrails govern both parties' conduct.
