There are many things to consider when renting a factory in Malaysia, such as budget, location, etc. After you have decided on the factory you want to rent, the next step you will need to face is signing your tenancy agreement. You will need to look out for the tenancy agreement.
When it is time to sign your tenancy agreement, it is normal that you will be hesitating if you have made the correct decision. Since a tenancy agreement is a legal document, you will need to understand the agreement before signing it.
So what do you exactly need to understand and look out for before you sign the tenancy agreement? We will bring you to understand more about the tenancy agreement.
What Is Inside A Tenancy Agreement?
When renting a factory, you must sign a tenancy agreement first. A tenancy agreement is an agreement that both the landlord and tenant sign. Each party will keep a copy of the agreement. The agreement should include all the terms and conditions of the factory that will be rented out.
As a tenant, it is your responsibility to negotiate the terms and conditions in the tenancy agreement with your landlord before signing it. Once you have signed the tenancy agreement, you and your landlord will be bound by its terms.
Landlords usually will draft their own tenancy agreements. If you are unsure of anything in the tenancy agreement, you can look for a legal professional to review it and get some advice. You will want to ensure that the terms and conditions stated in that piece of paper are fair. You must read through the agreement before signing it. Engaging a lawyer to look through it is another choice.
Tenancy Agreement #1 – Monthly Rent
The rental is an important part of renting a factory. You can negotiate the amount with your landlord, but most landlords will have a specified rent amount they would want. You and your landlord should agree on the rental amount.
The date where the rent will be due will be included in the tenancy agreement. Usually, it will be stated on the first of every month. But if needed, you can negotiate with your landlord to put it on a slightly later date.
You will want to check with your landlord regarding the mode of payment for your rental. If possible, have it written down in the tenancy agreement. Also, ensure that your landlord provides receipts after you have made your payment.
Tenancy Agreement #2 – Security Deposit
Usually, the amount of the security deposit equals two months’ rental. You should have paid the landlord upon signing the tenancy agreement. The purpose of the security deposit is that if you have damaged the property or the furnishings beyond reasonable wear and tear, or you pay your rental late, the landlord will deduct it from the deposit.
If you choose to end your tenancy before the agreed date stated in the agreement, be prepared that your security deposit will get forfeited. But, if everything goes smoothly within your tenancy period, your landlord should return you the full security deposit. Ensure that there is a clause in your tenancy agreement that your landlord should return the security deposit if everything goes smoothly.
Tenancy Agreement #3 – The Tenant’s and Landlord’s Particulars
Including the tenant’s and landlord’s particular is one of the important things to include in the tenancy agreement. The particular should consist of both tenant and landlord, identification proof such as identity card or passport number, contact details, and current address of both parties.
It is important to list the particular in the agreement, as the landlord can terminate the tenancy agreement if you violate it. The landlord may want to include a guarantor who will pledge to pay the rent in case you cannot pay it.
Tenancy Agreement #4 – Stamp Duty And Legal Fee In Tenancy Agreement
There will be a stamp duty if the property’s annual rental exceeds RM2,400. There will be no stamp duty if the annual rental is below RM2,400. For every RM250 above RM2,400 in annual rental, it will be RM1 for less than one year, RM2 between one and three years, and RM3 for more than three years.
The legal fees payable for the rental period less than three years are 25% of the monthly rent for the first RM10,000 of annual rent. For the next RM90,000 of the annual rent, 20% of the monthly rent will be charged. It is negotiable if the annual rent is over RM100,000.
If the rental period is over three years, the legal fee will be 50% of the monthly rent for the first RM10,000 annual rent. 20% of the monthly rent for the next RM90,000 of annual rent. It is negotiable if the annual rent is over RM100,000.
Tenancy Agreement #5 – Conduct A Background Checks On Your Landlord
You wouldn’t want to end up signing a contract with some scam artist. So, it is important to do background checks on your landlord to ensure you are renting from the actual landlord. You can politely request to view the land title.
You can also verify the owner’s status through a property management office. During your background check, you can try contacting the past tenants to learn about their experiences when they deal with the landlord.
The landlord might seem nice in person, but if you received negative feedback from previous tenants, you would probably want to reconsider if you want to rent from that landlord.
Tenancy Agreement #6 – Maintenance And Repair
You will want to note in the tenancy agreement which is liable for the maintenance and repair or check for the amount you are liable for. If the fixtures and fitting are caused by wear and tear, as a tenant, you are required to pay for some minor repairs. You will want to ensure the property is in good condition.
Usually, a rental tenancy will state the amount that tenants are liable to pay for any repair and maintenance. If the cost exceeds the amount stated in the agreement, the landlord must cover the remaining cost.
A standard rental agreement usually states that tenants are liable to pay for repair and maintenance costs below a certain amount. Ensure that there is a grace period included in the clause. Usually will be the first 30 days of the lease period for tenants to report defects. This can include faulty plumbing or wiring or broken sockets. Inform the landlord or agent to get them repaired during this grace period so you won’t have to pay from your own pocket. This is to ensure that you won’t be paying for damages that the previous tenant causes.