montakute

How do you cover yourself in the Tenancy Agreement so that you can stay for the duration of your tenancy even if your landlord sells the unit in the middle of your tenancy?

bakedbean

I guess you would need to agree to put a clause into the agreement. Of course the landlord may not agree, but there are plenty of rentals around, so it's a renter's paradise at the moment.

Of course there are Pros and Cons to renting, as there are Pros and Cons to buying. Always a personal choice.

JC3

Hi Montakute,

In the UK you would be covered by the Landlord and Tenant Act 1985.

Here in Malaysia there is no such act and the relationship between the landlord and the tenant is covered under the Contracts Act 1950 (assuming there is a Tenancy Agreement), the eviction of a tenant is covered under the Specific Relief Act 1950, and there are some other provisions regarding leases and tenancies contained in the National Land Code 1965.

As your Tenancy Agreement is a contract, you would most likely be covered by the Contract Act. That said, it would be worthwhile adding a clause or two to your Tenancy Agreement that spells out precisely what YOU want. Not least so that Landlord and Tenant understand each other clearly from the outset.

Before you agree to rent a property you may wish to ‘flush out’ whether the Landlord is in the midst of selling it, has actually sold it, or intends to sell it anytime soon.

You may find that the Tenancy Agreement already has clauses like this:


In the event the Landlord wants to sell the Property prior to the expiration of the tenancy term hereby created, the Landlord hereby covenants, undertakes and agrees that such sale shall be subjected to this Tenancy Agreement and shall procure the Purchaser of the Property to continue with the terms and conditions of this Tenancy Agreement in lieu of the Landlord.


The Agreement shall be binding upon the assigns of the Landlord etc.


Be cautious about such clauses:

a) if you don’t want to allow a sale because one of the reasons for renting the property is that you trust the landlord (to do repairs promptly, act honorably etc.), as a new owner may not be to your liking, and

b) to avoid endless prospective buyers viewing the property during your tenancy affecting your right to live there in peace.

You could add or amend such clauses along the following lines:

• The Landlord confirms and covenants to the Tenant that at the Date of this Agreement (NB NOT the Commencement Date) that the Landlord has not already sold, is not selling, and will not sell or assign the Property during the term of this Tenancy Agreement or any subsequent term thereof.

• The Tenant covenants with the Landlord - Upon given two days’ notice which is to be mutually arranged to permit prospective tenants and/or buyers to view the Property at reasonable daytime hours ONLY during the 30 days immediately preceding the determination of the Tenancy.
  

Please note that I am not a lawyer, and suggest you get a lawyer friend to review your tenancy agreement and draft such clauses for you.

JC3

montakute

Yes, I wondered if there was something like a Landlord Tenant Act so thanks for clarifying. And I also like that last clause about the showing of the unit.

InVinoVeritas

All my leases have had that last clause in them, so I guess it's fairly normal.

Otherwise just be aware that the more you tie the landlord down the more he will want to tie you down. I can think of more reasons the tenant would want out of a lease than the landlord, especially in the current market.

triage

Great suggestions in this thread. Can anyone share a tenancy agreement with all the extra clauses (to the tenant's advantage) included? Would be good to have some legal sounding language to cut and paste while negotiating with agents.

Thanks.

InVinoVeritas

There have been other threads on this subject - please, please use the forum search function before asking questions that have may already have been answered

owned

I added a few things to my rental contract.

1st was that if the landlord was desirous in selling the said property, the first option to purchase shall be given to the tenant.

2nd was if the tenant shall be desirous of continuing the tenancy hereby created for a further term of two years, the landlord will agree to a further term of two years subject in all respects to the terms and conditions to be agreed upon at that time.

3rd was the landlord shall ensure that any future purchaser of the said property shall be notified of the tenancy herein and be duly bound by the provisions herein.

teejaydee

I know nothing about Malaysian contract law, but if this contract term was part of a contract drawn up under English law, it would be invalid. That is because the two parties to the contract (yourself and the landlord) are seeking to bind a third party. This is not permitted and if the landlord were to sell the property while you are still the tenant, you would be unable to enforce this contract term.

Perhaps Malaysian law is different (although I doubt it), but as always, it is one thing to include terms and conditions in a contract, but quite a different thing to try and enforce them.

InVinoVeritas

I have seen this in French rental contracts. I don't really see why it is illegal as the third party's contract will be with the first party (the landlord) and this can include a clause confirming the 2nd party's (the tenant) rights. It is simply up to the third party whether they accept such a contract.

My problem was with the 2nd clause which makes no sense at all.

eCdD

This two points I also added in my rental contract. In my case the contract can be extended after 12 month for one year more. In the second year both parties can finish the contract anytime by giving two months notice. But unfortunately the owner reserved the right to increase the rent in the second year by 5 %.

The good thing about renting in Malaysia, it is always the owner who needs to pay the agents. The bad thing, it is always the tenant who has to pay the legal and stamp fee. Unless you are a extremly good negotiator or the owner is desperate to rent out.

JC3

Malaysian Law is generally based on (and similar to) English Law.
My understanding is that a UK landlord CAN sell the property whilst you are a tenant, but the new owner must allow the tenant to remain there (on the original agreed tenancy terms) until the end of the tenancy term.

Here's an extract from a ThisIsMoney article about whether a Landlord can kick-out a tenant mid tenancy:

A legal expert from Shelter says: ‘If it’s a fixed term agreement for 12 months without a ”break clause” then the tenants have the right to remain until the end of that agreement in October.


‘There are only two ways in which the landlord can lawfully evict them: (1) if they break the terms of their agreement, for example by failing to pay the rent; (2) if there is a ‘break clause’ in the agreement which entitles the landlord to bring it to an end prematurely (usually after six months).


‘It doesn’t sound like there is a break clause included in this case, but if there was, for example after six months, then the landlord would still need to give two months’ notice. A landlord must always give tenants two months’ notice, not one.


‘In both cases the landlord would need to get a court order before a lawful eviction could take place.’


A spokesman for the National Landlords Association said: ‘Having signed a contract for 12 months the tenants are well within their rights to stay up until the stated date.


‘Obviously the landlord is well within his rights to sell the property, however this is on the permission that the incoming owner has to take over the tenancy with tenants in situ, which when it comes to an end can then re-negotiate with them on his/her terms.


See: Can landlord kick us out of our house after four months because he's selling up? | This is Money

Here In Malaysia going to court to enforce your rights would be a PITA.
It's therefore a good idea to insert a clause in your rental agreement that prevents any viewings of the property until one of two months before the end of your tenancy term. This gives you some control and ensures you can live there in peace. Your landlord is much less likely to be able to sell the property if agents and prospective buyers cannot view it.

JC3

bakedbean

Yeh we had that clause about preventing viewings until a month before end of rental agreement....and we enforced it too. Jolly good clause.