MALAYSIA Law and Practice Contributed by: Natalie Ooi and Nicholas Ooi, Ooi & Ooi
the property and the management will handle the maintenance and repairs of the stratified property. 6.10 Payment of Utilities and Telecommunications Some landlords will install individual meters for the property and the tenant will pay based on usage. Utility bills for the common area shall be borne equally among the tenants. If no individual meter is installed, the tenants will negotiate and agree amongst themselves on the utility bills. 6.11 Payment of Property Taxes Landlords are typically responsible for the real estate taxes – eg, quit rent and assessment, unless otherwise agreed in the tenancy. 6.12 Insurance Issues Usually the landlord will purchase fire insurance and insure the property against fire damage. There is no publicly verifiable data on whether tenants have recovered rent payments costs under business interruption insurance policies as a result of office closures and clean-up costs incurred during the COVID-19 pandemic. 6.13 Restrictions on the Use of Real Estate Landlords will typically impose permitted uses and restrictions in the tenancy agreement. The SMA, which governs stratified property, may impose further restrictions on the use of com - mon areas, etc. Local authorities may have zon - ing laws and building usage restrictions. 6.14 Tenant’s Ability to Alter and Improve Real Estate The tenant is permitted to alter or improve real estate with the landlord’s prior approval. Further
conditions may be imposed by the management if the property is stratified. If the improvement involves structural change, approval from the local authority is required. 6.15 Specific Regulations For Malaysia, all leases are generally covered by: • the NLC, which governs the creation, regis - tration and termination of leases over land; • the CA1950, which governs the lease agree - ment as a contract; and • the Specific Relief Act 1950, which is relevant for the enforcement of lease rights. Leases over residential properties may be sub - ject to the Housing Development (Control and Licensing) Act 1966. While primarily for sales, this act indirectly affects residential leasing of strata-titled properties by imposing obligations on developers (eg, maintenance and delivery of common areas). Management corporations set up under the SMA may affect tenants’ rights and obligations on common properties (eg, use of facilities, pay - ment of service charges). Tenancy laws are largely unregulated. Residen - tial tenants have limited statutory protection unless such protections are contractually agreed upon. The market is largely landlord-driven. For offices/industrial properties/retail or shop - ping malls, there are no industry-specific leasing laws; leasing is subject to the contracts made between the parties. For hotels/hospitality assets, leases or manage - ment agreements are influenced by the Tourism Industry Act 1992 or any licensing regulations made by the Ministry of Tourism. Most hotel
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