Tenancy troubles

Tenancy troubles
13/09/2005 The Star Articles of Law with Bhag Singh

A person has a house in Malaysia but spends several years working abroad. During this time the house is rented out to a family introduced by a neighbour. The tenant banks the rent into the landlord’s bank account. All seems well.

The person appears to be friendly and nice. So the landlord is comforted. The tenant is told that he will be responsible for minor repairs but anything major will be paid by the landlord. The landlord tells the tenant that he could deduct any payment made for repair against the rental.

A tenancy agreement was prepared and signed and left with the tenant for him to stamp. Now more than a year later the landlord finds that recently the rent was not banked into the landlord’s account and the tenant claims to have deducted amounts purportedly for repair which are unacceptable to the landlord.

The tenant has decided to leave and it is discovered that some parts of the house have been damaged and some items such as air conditioners are missing. The landlord does not know what to do because some friends have advised him to lodge a police report while others have told him to sue the tenant while some have told him that since the tenancy agreement has not been stamped it is null and void!

Essentially it is a transaction between two parties on terms mutually agreed. What has happened is that one of the parties has breached the agreement. So it is broadly a question of breach of contract or rather the tenancy agreement.

Lodging a police report is not likely to produce any immediate results. Very often a person faced with a problem is inclined to react by lodging a police report in the hope that the act of doing so will either frighten the other party to respond to one’s claim or the police will act to help the complainant.

Both expectations are in most cases not to be met because adversaries in commercial disputes are unlikely to be frightened by the lodging of police reports. On the other hand the police are unlikely to act on such reports unless a crime is committed.

This is because a police report is to initiate the commencement of investigations to ascertain whether an offence has been committed. It is in fact a prerequisite before investigations will commence. However if no offence is disclosed, then the question of commencing investigations does not even arise.

In this case what is involved is not what would generally be regarded as an offence but merely a breach of terms in that the tenant has failed to fulfil his obligations.

Apart from not paying rent it appears that the tenant has been responsible for some damage to the property and an air conditioner and other equipment have gone missing. But it is not known if the items were stolen or removed by the tenant.

Of course if it is known that they were stolen, then there is the element of an offence being committed. However given the overall nature of the transaction the authorities are more likely to view it as a private transaction and they would not interfere.

This being the case, the remedy for the landlord lies in pursuing a civil remedy. This would be on the basis of the agreement entered into and the non-fulfilment of obligations.

As the tenant has now vacated the premises the landlord’s only option is to sue the former tenant to recover the unpaid rental and expenses incurred for repairs.

The fact that the Tenancy Agreement has not been stamped does not make the arrangement null and void. It does not mean that rent in arrears cannot be recovered or that the tenant would not be liable to compensate the landlord for the damage caused.

Even if there was no formal Tenancy Agreement the landlord would be able to recover the rental and any damage caused to the premises.

An area of dispute that is likely to emerge is the extent of the repairs that the tenant is liable for. The words used in agreement are not really helpful because parties will disagree on what is meant by minor and major.

This is where a properly worded tenancy agreement could play a useful role by stating precisely the kinds of repairs that the tenant would be responsible for.

This objective could be even better achieved if this aspect was particularised in as much detail as possible. The more specific the provisions the less the scope for any disagreement.

In the absence of specific agreement the position would be that the tenant would be responsible for ordinary expenses incurred by the need to maintain the premises as handed over but not be responsible for any structural defects in the premises.

Of course the landlord would be entitled to make a claim against the tenant on the basis of the obligations discussed. However the mechanics of doing so and the implications of being involved in different tribunals would be another matter.

Given the scenario it is unlikely that the tenant will pay anything unless he is taken to court. This of course involves litigation which many people would rather avoid. Time constraints, effort and costs have to be considered.