KUALA LUMPUR: The government should allow the market supply and demand to decide on the rental agreement, and to make this the basis for the proposed Residential Tenancy Act (RTA), said Tan Sri T.C Goh, President of the Federation of Chinese Associations Malaysia (Huazong).
He stressed that the government should not attempt to interfere with the existing rental market through such a move, and that it should be decided by the market supply and demand. After all, this rental issue covers an extensive area, including urban areas, strategic and non-strategic areas, besides the different types and prices of residential properties. Hence, this rental issue is best left to be decided by the market forces, so as not to affect the long-term development and growth of our real estate industry.
Stressing that the content of the proposed Act should be based on the interests of both landlords and tenants, he proposed the Ministry of Housing and Local Government to gather more feedback on this issue from the public, including landlords and tenants, housing developers, real estate agents, and the legal fraternity, via its official website.
Goh who is also President of the Federation of Chinese Associations Sabah (FCAS) expressed this in a statement issued today, while commenting on the said proposed Act.
He said, Huazong and its members too have received some feedback from various quarters in regards to this matter, and it is hoped that the government could take into consideration the views expressed by various quarters, in order to come out with policy that would truly benefit all parties involved.
Recent news reports quoted Housing and Local Government Minister, Datuk Seri Reezal Merican Naina Merican for saying that the proposed Act will be tabled in the Parliament in its third sitting for this year.
Goh said, in principle he agrees with the government’s objective of proposing the said Act i.e. to provide a proper legislation to safeguard the interests of both landlords and tenants as, currently there is no specific legislation in Malaysia that provides a legal framework for regulating the relationship between landlords and tenants, whether residential, commercial, or industrial premises. Currently, landlords and tenants in Malaysia are relying on the Contracts Act 1950, Distress Act 1951 and Civil Law Act 1956, but there’s no specific legislation to regulate their affairs.
He opined that, if the government were to interfere with the rental market, especially by making sure that the proposed Act would lean towards protecting the tenant, it would then be unfair to the landlord. He thus reiterated that it is best to let the market forces decide on the rental agreement between landlord and tenant.
He reiterated that to ensure a ‘win-win’ situation for all parties concerned, the government should take into consideration of such factors like locations, types and prices of the residential properties, category of tenants (such as the B40 group), when drafting the proposed Act, instead of resorting to ‘one-size-fits-all’ approach.
He also urged the Ministry concerned to be more discerning when analyzing data/feedback gathered via its website, especially in regards to the ratio between tenants and landlords, where it indicated that a vast majority of those who responded to its survey were the tenants, hence the tendency to protect the tenants.
“The Ministry should not lean towards protecting the tenants simply because a majority of those who responded to the survey were the tenants. After all, it is common sense that there are more tenants than landlords,” he said.
In regards to the requirement under the proposed Act that the two-month security deposit for rental units be kept by a certain government agency, Goh believed a majority of landlords would not agree to this as it lacks guarantee besides being unfair to them. He also opined that the Ministry should better clarify the role of the said government agency and to provide more details on the administration of the security deposit.
“There other issue is, in the event of the landlord is faced with a bad tenant who caused some damages to the rental unit, and the repair cost is expected to be more than the security deposit, how is this particular ‘government agency’ going ensure that the interest of the landlord is protected?” he asked.
He said, many landlords also pointed out that over the years, especially during the Covid-19 pandemic in the last two years, when property rental came crashing down, the government did nothing to intervene.
On the proposed Special Tribunal to settle disputes between parties involved in residential rental transactions, he said while he’s not against such a proposal, so as to save both landlords and tenants the hassles, it nonetheless must be truly an independent and neutral body.
“It should not be like the Tribunal for Consumer Claims which we have currently, whose task is solely to protect the interests of the consumers,” he said.