Getting your tenants to pay rent promptly every month is part and parcel of the duties as a Landlord. However, this task may turn your days into a nightmare when you meet difficult tenants.
TYPES OF DIFFICULT CLIENT
There are four (4) typical difficult tenants whom you may relate or encounter:
(A) Meet Alicia: The ‘Ghost’ Tenant
Bruce lets an apartment to Alicia, a nice lady who pays rent regularly at the beginning. Alicia starts to default in payment of rental. Whenever Bruce calls to remind her, she would give some excuses or plead for an extension of time. Gradually, Bruce finds that Alicia is not picking up his phone calls and has been avoiding him everytime he tries to contact her. Bruce is assured that Alicia is still occupying the premises.
(B) Meet Chris: The Disappearing Tenant
Bruce is also renting a floor of commercial shop lot to Chris, who wish to start off his first IT business. Chris’s business failed and he is in a huge debt. Chris absconded, leaving the premises together with some of his belongings. The tenancy period has another year in effect and Bruce has lost contact with Chris. Bruce is afraid that Chris would come back and claim for his lost items and as such Bruce could not rent the space out to other potential tenant.
(C) Meet Brilliant Sdn. Bhd. : The Litigious Tenant
Bruce is suing Brilliant Sdn Bhd to recover for arrears of rental for 10 months and repossession of the premises. However, Brilliant Sdn Bhd is not happy with Bruce’s demands and eager to go to the court which increase the time and costs of the proceedings.
(D) Meet Eric: The Bodybuilder Tenant who is Aggressive
Bruce rented a house to Eric, who after a while, behaved aggressively during his occupation. What followed was a series of bizarre behaviours that caused problems for Bruce. He caused serious damages to the house and the house is not in a good and tenantable conditions. He harassed Bruce whenever Bruce wanted him to move out.
WHAT SHOULD BRUCE DO?
What rights and remedies Bruce could resort to under the law?
Demand for Outstanding Debts
Bruce should engage a lawyer to issue a notice of forfeiture to his tenants before he commences any legal action. Notice of forfeiture is a statutory notice which gives his tenant some reasonable time to remedy the breaches of the tenancy agreements.
If his tenant fails to remedy the breaches within the reasonable time, the tenancy agreement will be terminated. His tenants shall deliver the vacant possession of the properties to Bruce within some reasonable period.
If his tenants fail to deliver vacant possession of the property to him, Bruce can commence legal actions against the tenants.
Self-Help Remedies
Can Bruce resort to self-help remedies without going through a legal action?
Self-help remedies are such as termination of the water and electricity supplies, change of locks of the property, breaking into the premises and evict the tenants by using own force.
In Malaysia, the courts do not recognise self-help remedies. Bruce shall obtain a court order to recover vacant possession of his properties. This is clearly provided under Section 7(2) of the Specific Relief Act 1950:
“Where a specific immovable property has been let under a tenancy, and that tenancy is determined or has come to an end, but the occupier continues to remain in occupation of the property or part thereof, the person entitled to the possession of the property shall not enforce his right to recover it against the occupier otherwise than by proceedings in the court.”
In the event Bruce resort self-help remedies, the tenants are entitled to claim for damages and loss of property as a result of trespass and false imprisonment against Bruce.
The exceptional rule is that parties agreed in the tenancy agreements that Bruce is allowed to terminate the water and electricity supply supplied to the premises.
Legal Actions
Bruce can seek redress against his tenants in the following methods:
(A) Distress Action
A distress action allows a landlord to recover the unpaid rent by seizing the tenant’s belongings and sell the items for the purpose to recover the arrears under the Distress Act 1951.
It is worth noting that Distress Action does not allow Bruce to terminate the tenancy agreements and to recover vacant possession of the property.
(B) Repossession Order
Alternatively, Bruce can commence a legal action against the tenants recover vacant possession of the property.
In this kind of legal action, Bruce can apply to the Court to claim for the reliefs, such as, repossession of the premises, outstanding rentals, outstanding utilities, costs of repair, double rental (mense profit) (Section 28(4) of Civil Law Act 1956), interest and costs.
Double rental (mesne profit) is governed under Section 28 (4) of Civil Law Act 1956:
“(a) Every tenant holding over after the determination of his tenancy shall be chargeable, at the option of his landlord, with double the amount of his rent until possession is given up by him or with double the value during the period of detention of the land or premises so detained, whether notice to that effect has been given or not.”
Bruce’s claims shall also be in accordance with the terms and conditions of the tenancy agreements.
(C) Small Claims Procedure
Alternatively, Bruce can sue the tenants through the small claims procedure in the Magistrates’ Court pursuant to Order 93 of the Rules of Court 2012. The small claims procedure shall apply to the outstanding debts which are less than RM5,000.00.
The parties shall not be legally represented by lawyers. The law allows the corporate company to be represented by an authorised person.
If any of Bruce’s tenant’s counterclaims exceed RM5,000.00, Order 93 shall stop to apply and the Court shall proceed to hear the case as if the claim had been begun by a summons under Order 5 of the Rules of Court 2012.
Prevention is Better than Cure
These are some tips for you to prevent difficult tenants in the market:
(a) Know Your Tenants More
You may conduct some background checks on your tenants such as family background, occupation, place of working, hometown etc.
(b) Behavioural Red Flags
If you notice that your tenant show some unpleasant or abnormal attitudes or appear to be abusive, you may choose not to let the premises to such tenant.
(c) Comprehensive Tenancy Agreement
It is important to enter in a tenancy agreement with good and comprehensive terms and conditions with your tenants.
Have your tenancy agreement set out the clear terms and conditions to govern the tenancy? What if:
- your tenant sublet the property without your consent;
- your tenant renovate the property without your approval or the management’s approval;
- your tenant rares pets (which is prohibited by the house rules);
- you or your tenant intends to terminate the tenancy agreement earlier;
- your tenant is in default of rental and utiltiies bills; and
- your tenant damages part of your property.
Therefore, you should engage a lawyer to draft a tenancy agreement which protects your rights during the tenancy period.
(d) Clear Communication of Rules
Clear communication of the rules during initial negotiations stage is very important. Do not be afraid to say ‘No’ or to give reminders to your tenants whenever it is necessary. Let your tenants know about the rules in the beginning shows that you care and are taking the role as a Landlord seriously.
(e) Keep Track of the Payment Every Month
It is also important to keep track of the tenant’s payment of rental, electricity, water and sewerage every month. You must stress the importance or the consequences of late payment with “pay or vacate” letters. In this way, your tenants are trained to treat the prompt payment of rental a serious matter.
The contents of this article do not constitute legal or other professional advice or an opinion of any kind. It is provided for general information purposes only.
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By Chloe Lim & Carmen Leong