Malaysia Residential Tenancy Act: What It Means for Renters
Edited by Teh Kim Guan, ACMA, CGMA · Updated 2026-06-24
Malaysia does not yet have a Residential Tenancy Act. That matters because without one, landlords and tenants operate under contract law alone, leaving disputes expensive, slow, and heavily tilted toward whoever can afford a lawyer. The proposed Residential Tenancy Act (RTA), overseen by the Ministry of Housing and Local Government (KPKT), is now in its final drafting stages and is expected to be tabled in Parliament in 2026. This guide explains what is proposed, how it compares to what exists today, and what renters should do right now.
Why Malaysia Needs a Tenancy Act
Most developed rental markets have dedicated legislation: the UK has the Housing Act, Australia has state-level Residential Tenancies Acts, and Singapore has the Residential Tenancies Act 2023. Malaysia’s rental market, estimated at over 1.5 million tenanted households by NAPIC/JPPH, runs almost entirely on privately drafted agreements.
The result is predictable. Deposit disputes clog the Small Claims Court. Evictions happen without notice. Renters in older properties live with no clear right to basic repairs. Landlords, equally, have no guaranteed mechanism to remove non-paying tenants without a lengthy civil suit. Both sides lose.
The proposed RTA aims to fix this with standardised rules, a dedicated dispute tribunal, and mandatory deposit controls.
What the Proposed RTA Would Change
1. Deposit Caps and a Controlled Deposit Account
Under the proposal, security deposits would be capped, with early drafts circulated by KPKT suggesting a maximum of two months’ rent for a standard residential tenancy. More significantly, landlords would be required to place the security deposit into a special account administered by a government-appointed Controller, rather than holding it themselves.
This is the most meaningful change for renters. Today, if a landlord refuses to return your deposit, you have no direct remedy short of suing. Under the proposed system, the Controller holds the funds and releases them to the tenant upon termination, provided the landlord has not filed a valid claim for deductions. Deductions would be limited to actual damage beyond fair wear and tear, confirmed by inspection.
2. A Dedicated Residential Tenancy Tribunal
The proposed Act would create a Residential Tenancy Tribunal with jurisdiction over claims up to RM 25,000 (with a proposal to raise this to RM 50,000). The tribunal would target resolution within 120 working days, a significant improvement over civil court timelines that routinely run 18 to 36 months.
Filing fees are expected to be minimal, and legal representation may be restricted or discouraged, keeping the process accessible to ordinary tenants. Decisions would be binding, with an appeal route to the High Court only on points of law.
3. Standardised Notice Periods
Current practice relies entirely on what the tenancy agreement says, and many agreements simply omit notice clauses or set unfair periods. The RTA would legislate minimum notice periods, likely 30 days for monthly tenancies and 60 days for annual leases, giving tenants time to find alternative accommodation.
4. Fit-for-Habitation Standards
Landlords would be obligated to maintain the property in a habitable condition throughout the tenancy. While the specific standards have not been finalised, they are expected to cover structural integrity, water supply, sanitation, and working locks. Renters could file at the tribunal if a landlord refuses to carry out essential repairs.
5. Anti-Discrimination Provisions
The proposed bill includes provisions prohibiting landlords from refusing to rent on the basis of race, religion, or nationality. These provisions have been the most debated in stakeholder consultations, with some property groups arguing implementation will be difficult to enforce.
Current Rules While the RTA Is Pending
Until the RTA passes, the following framework applies:
| Area | Current Position (2026) |
|---|---|
| Deposit cap | No statutory cap. Market norm: 2 months security + 0.5 month utilities |
| Deposit held by | Landlord directly, no oversight |
| Dispute tribunal | None for residential tenancies |
| Small Claims Court | Claims up to RM 5,000, no lawyer needed, RM 10 filing fee |
| Consumer Claims Tribunal | Up to RM 25,000, corporate landlords only |
| Notice period | Whatever the agreement states (often 1 month) |
| Repairs obligation | Contract-based only |
| Stamp duty | Tiered by lease duration, calculated on annual rent, mandatory via LHDN e-Duti Setem |
Stamp Duty: What Renters Pay Today
Effective 1 January 2026, all tenancy agreement stamp duty must be paid through LHDN’s e-Duti Setem portal at mytax.hasil.gov.my. Rates are tiered by lease duration:
| Lease Duration | Rate per RM 250 of Annual Rent |
|---|---|
| Up to 1 year | RM 1.00 |
| 1 to 3 years | RM 3.00 |
| 3 to 5 years | RM 5.00 |
| Over 5 years | RM 7.00 |
Minimum stamp duty is RM 10. Stamping must be completed within 30 days of signing. An unstamped agreement is not admissible as evidence in court, which is a common trap in deposit disputes.
Where Renters Can Go Now for Disputes
Without a tenancy tribunal, your options for 2026 are:
Small Claims Court suits landlords for amounts up to RM 5,000. Filing fee is RM 10. No lawyer is required. Suitable for most deposit disputes on lower-rent properties.
Consumer Claims Tribunal (Tribunal Tuntutan Pengguna Malaysia / TTPM) handles claims up to RM 25,000 but only where the landlord is a corporate entity (a company, not an individual). Most private landlords do not qualify.
Mediation via KPKT or local councils: Some state and local governments offer informal mediation, but uptake is low and outcomes are non-binding.
Civil court: Practical only when the disputed amount exceeds RM 25,000 and both parties have legal representation.
What the RTA Would Not Cover
Based on drafts and stakeholder consultations, the proposed Act would cover only residential properties. Commercial and industrial tenancies would remain governed by contract law. Tenancies in government-managed low-cost housing schemes may also have separate treatment.
The Act would not retroactively apply to existing tenancy agreements signed before the commencement date. If you are mid-tenancy when the Act passes, your existing agreement governs until renewal.
How to Protect Yourself Now, Before the Act Passes
You do not need to wait for Parliament. Several practical steps close the protection gap:
Use a stamped agreement. An unstamped agreement cannot be used as evidence in court. Stamping costs a few hundred ringgit and is done in 15 minutes online at mytax.hasil.gov.my.
Document the property condition at handover. Take timestamped photos and videos of every room, appliance, and fitting before you move in. Send copies to the landlord by email so there is a date-stamped record. This evidence is decisive in deposit disputes.
Include a clause on deposit return timing. Malaysian law does not currently specify when a deposit must be returned. Add a clause requiring return within 14 days of key handover, subject to any written deduction notice with supporting receipts.
Verify the landlord owns the property. You can search the title at any Land Office or via some state government portals. Renting from someone who is not the owner creates serious risk.
Keep all rent receipts. Even for bank transfers, save the transaction records. For cash payments, insist on a signed receipt each time.
Key Takeaways
- Malaysia has no Residential Tenancy Act yet. The proposed RTA is in final drafting at KPKT and is expected to be tabled in Parliament in 2026.
- The proposed Act would cap security deposits (likely two months’ rent), require deposits to be held in a government-controlled account, and create a dedicated tribunal for disputes up to RM 25,000 to RM 50,000.
- Until the Act passes, renters must rely on their written agreement, Small Claims Court (up to RM 5,000), or the Consumer Claims Tribunal for corporate landlords (up to RM 25,000).
- Stamp your tenancy agreement. An unstamped agreement cannot be used as evidence in court.
- Since January 2026, stamp duty must be paid via LHDN e-Duti Setem at mytax.hasil.gov.my.
- Document your property condition at move-in. This single step resolves most deposit disputes.
Frequently Asked Questions
Is there already a tenancy law in Malaysia? Not a dedicated residential one. Tenancy agreements are governed by the Contracts Act 1950 and Specific Relief Act 1950. The proposed Residential Tenancy Act, once passed, will be the first standalone law specifically for residential tenancies.
When will the Residential Tenancy Act be passed? As of mid-2026, the Bill is in final drafting by KPKT. Minister Nga Kor Ming stated in early 2026 that it would be tabled in Parliament this year, but no confirmed parliamentary calendar date has been announced. Renters should monitor KPKT announcements at kpkt.gov.my.
Can my landlord keep my deposit if I leave early? Under current law, it depends on what your tenancy agreement says. If you break the lease without cause, a landlord can typically deduct actual losses, including rent for the unexpired notice period and re-letting costs. The proposed RTA would require landlords to itemise any deductions in writing and return the balance within a defined period.
What can I do if my landlord refuses to return my deposit today? File at Small Claims Court (up to RM 5,000, filing fee RM 10, no lawyer needed) at your nearest Magistrates Court. If the amount exceeds RM 5,000 and your landlord is a company, file at the Consumer Claims Tribunal. Bring your stamped tenancy agreement, move-in photos, receipt for deposit payment, and correspondence with the landlord.
Will the RTA affect my existing tenancy agreement? Proposed transitional provisions suggest the Act will apply to new agreements and renewals after the commencement date. Existing agreements running when the Act passes would likely complete under their original terms. Check the final enacted text when it is published, as transitional rules may change before Royal Assent.
For more on navigating property decisions in Malaysia, see our guides on renting in Malaysia and understanding your tenancy agreement. Stamp duty calculations are covered in our buying property in Malaysia section.
Malaysia-based chartered management accountant (ACMA, CGMA) and embedded executive who has worked across finance, operations, and product roles with Malaysian companies. Every WangWise guide is checked against official Malaysian sources. How we review · About the editor
Educational content only, not financial advice. Verify current figures with official sources.