A tenancy agreement is a binding contract between a tenant and a landlord which outlines the rights and responsibilities of each party during the tenancy period. The tenancy period is usually created for a term which does not exceed three (3) years, otherwise it will be considered as a lease.
A tenancy agreement comprises of various terms such as the tenancy period, deposit and rental amount, mode of payment, notice period, option to renew, inventory list and so on. So, what happens if the tenant defaults in paying the monthly rental or if there is no notice period in the tenancy agreement? Can the landlord claim for double rental if the tenant holds over the premises without the owner's consent?
The Remedy of Self-Help
Many a times, landlords will resort to self-help measures to recover the property from the tenant such as changing the locks to the property, shutting off water and/or electricity supply to the property or simply removing the tenant's belongings from the property, without having any regard as to whether they are violating the law. Section 7(2) of the Specific Relief Act 1950 extinguishes a landlord's right to recover possession of his property through the remedy of self-help, instead the landlord is obliged to recover possession of the property via proceedings in court. A landlord who takes the law into his own hands and forcibly evict a defaulting tenant may very well find himself sued by the tenant as provided by Section 8 of the Specific Relief Act.
The proper procedure for a landlord to evict a defaulting tenant begins with issuing a letter to the tenant as a reminder to regulate the payment of the rental. In the event the tenant still refuses to pay the rental, the landlord may give a Notice to Quit to the tenant to terminate the tenancy and demand for the rental arrears.
Notice Period
A tenancy agreement would usually state the length of notice each party would need to give to the other if one party wishes to earlier terminate the tenancy agreement. However, in the absence of a notice period clause, sufficient notice must be given by the landlord to the tenant in order to effectively terminate a tenancy. A valid Notice to Quit will have the effect of terminating the current tenancy on the date of termination. Failure to give notice will deem the termination of a tenancy ineffective.1 In the event a landlord through his solicitors files a suit against the tenant for rental arrears and to seek for an order for vacant possession of the property from the Court, it is of monumental significance for the landlord to prove service of a valid Notice to Quit on the tenant to prove that the tenancy has been effectually terminated.
According to the case of Saadian Bte Karim v Ong Ting Chai2, the length of notice depends on the period of the tenancy. In the case of periodic tenancies of less than a year, the Notice to Quit must be one full period, expiring at the end of a completed period. For example, a weekly tenancy would require a week's notice while a monthly tenancy would require a month's notice. Termination of a tenancy is ineffective if insufficient notice had been given.
However, there are situations whereby the length of notice depends on the type of business of the tenant for non-residential properties. In the case of JR Lincks Educational Consultants Sdn. Bhd. v Goh & Sons Enterprise Sdn. Bhd3, it was held that any valid notice to terminate a fixed term tenancy of business premises in order to be sufficient and reasonable in the absence of any express and unambiguous term in the agreement shall not be less than a period of three months. Similarly, in the case of Wisma Perkasa Sdn. Bhd. v Weatherford (M) Sdn. Bhd. & Anor4, it was held that the period of one month for a large commercial tenant to quit and deliver vacant possession of the business premises was clearly unfair and unreasonable.
Double Rent
In the event the tenant fails to deliver vacant possession of the demised premises after the expiry of the notice period or after the determination of the tenancy without the consent of the landlord, the tenant is liable to pay to the landlord double the rental payable under the tenancy pursuant to Section 28(4) (a) of the Civil Law Act 1956. In the case of Imbi World Sdn. Bhd. v Deluxe Tours Sdn. Bhd5, one of the issues in the case was whether the landlord was entitled to claim for double rent and damages from the tenant as a result of holding over after the expiry of Notice to Quit to which the Court of Appeal held in the affirmative. However, where the tenancy had expired but the tenant remained in the demised premises while still paying rent which the landlord accepted, the tenant will be deemed as having lawful possession of the premises and were holding over the property with the landlord's consent. The tenant will only be trespassers and deemed to be holding over from the date of the expiry of Notice to Quit6.
Conclusion
It is clear that any landlord seeking to evict a defaulting tenant must do so cautiously and in accordance with the law. If the tenancy agreement contains a clause on notice of termination, the parties are strictly bound by that clause. On the other hand, if such clause was absent in a tenancy agreement, the court will consider other factors such as the intention of the party, payment of rental and other relevant circumstances in the matter. Hence it is important to have a well drafted tenancy agreement to decrease the likelihood of any unambiguous provisions which may lead to litigation.
Footnotes
1. Yeoh Pang Kwan v William Janz [1972] 1 MLJ 25
2. [1996] 5 MLJ 646
3. [2008] 3 CLJ 815 at page 840
4. [2017] 10 MLJ 758 at para 71
5. [1997] 3 MLJ 531
6. Rohasassets Sdn Bhd (formerly known as Wisma Perkasa Sdn Bhd) v Weatherford (M) Sdn Bhd & Anor [2020] 1 MLJ 557 (FC)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
