The landlord’s rights if tenant defaults in rent payments
Landlord and tenant’s rights and obligations are stated in the tenancy agreements signed between the parties. Upon parties entered into the said tenancy agreement, the tenant has the right to use the said premises pursuant to the terms stipulated in the tenancy agreement. In return, the landlord is entitled among others, to collect rent from the tenant as agreed in the tenancy agreement.
Due to the Covid-19 pandemic and global economic downturn, landlords and tenants may face financial difficulties. Tenants’ businesses are affected by the lockdown and landlords are affected due to the default on rental by their respective tenants.
In such situation, it is prudent for the landlord to issue a demand and/or notice of termination against the tenant before proceeding to file a claim in the Court. If the tenant fails to pay the outstanding rental due after receiving the demand and/or notice of termination, the landlord may consider the following legal recourse.
An application for writ of distress can be filed in the Court by the landlord when the tenant fails to settle rental and to vacate the premises despite a notice of termination had been served on the tenant. A writ of distress is a straightforward procedure and it is not a lengthy process compared to filing a writ and statement of claim in the Court.
It is pertinent to note that under Section 5(1) of the Distress Act 1951 (“DA”), the landlord is unable to recover any utility bill in arrears and may only claim up to twelve (12) completed months of the outstanding rentals, immediately preceding the date of application.
An application for writ of distress will be filed in the Court by way of ex parte, which means that the tenant will not be notified of the application until the bailiff or sheriff is present at the premises to seize the movable properties from the tenant.
The movable properties belonging to the tenant which have been seized will be auctioned to recover the rental arrears including the fees and expenses of the bailiff.
The auction will proceed accordingly unless the tenant pays the amount due within 5 days from the date of the notice of the seizure prepared by the bailiff under the DA or obtains an order to restrain such sale.
However, there are restrictions on the item which is seizable from the tenant. Pursuant to Section 8 of the DA, the bailiff cannot seize among others, the tenant’s necessary wearing apparel for himself and his family and tools used in the course of his ordinary trade or business.
One of the disadvantages of the distress proceedings is that it does not terminate the tenancy agreement between the landlord and tenant. It only allows the parties to recover the rental arrears. As such, the landlord is not able to recover and/or repossesses the premises by way of distress proceedings.
Civil proceedings in Court
An alternative to the landlord to recover rental arrears and vacant possession of the premises is to commence an action in the Court after the tenant failed to respond to the demand and/or notice of termination which was served to the tenant.
It is also important to note that a landlord can rely on Section 28(4)(a) of the Civil Law Act 1956 (“CLA”) to charge and/or claim for double rental if the tenant fails to handover the vacant possession after the notice of termination has been served to the tenant and/or after the expiry of the tenancy period pursuant to the tenancy agreement.
The issue in relation to double rent under Section 28(4)(a) of the CLA was substantially discussed in the recent Federal Court case Rohasassets Sdn Bhd v Weatherford (M) Sdn Bhd & Anor  1 CLJ 638.
Abdul Rahman Sebli FCJ held that that the discretion to charge double-rent vests in the landlord:-
“ First of all, the discretion to charge double rent is vested in the landlord and not the Court. The Court’s role in a dispute under section 28(4)(a) of the Civil Law Act is merely to determine whether the option to charge double rent had been properly and lawfully exercised by the landlord. If the discretion had been properly and lawfully exercised by the landlord, the Court has no discretion but to allow the claim for double rent. If, on the other hand, the discretion had not been properly and lawfully exercised, the landlord is not entitled to charge double rent and the Court will rule accordingly.”
In addition, the Federal Court also held that double-rent is chargeable by operation of law:-
“ In cases like the present, where the tenancy agreements provide for payment of double rent, such rent is chargeable not only by the terms of the agreements but more importantly it is chargeable by operation of law and in this regard section 28(4)(a) provides that it continues to be chargeable “until possession is given up” by the tenant.”
Therefore, the landlord is entitled to claim the double rental from the tenant as long as the landlord has complied with Section 28(4)(a) of the CLA and even though the term double rental is not stated in the tenancy agreement.
It is stated in the case Rohasassets there is no requirement on the landlord to show contumacious conduct on the part of the tenant holding over to render the tenant liable to pay the said double rent:-
“ At the risk of repetition, it needs to be emphasized that the Court’s duty in a claim under section 28(4)(a) of the Civil Law Act is merely to determine whether the option to charge double rent had been exercised properly and lawfully by the landlord. The Court is not concerned with contumacious conduct on the part of the tenant who holds over. Even if the tenant is not guilty of contumacious conduct, the tenant is still liable to pay double rent if the landlord has decided to charge double rent and does not consent to the tenant’s holding over and has asked the former tenant to vacate the premises.”
Once the landlord obtained a judgment and/or court order against the tenant, he may proceed to apply for leave to issue a writ of possession against the tenant to reclaim the possession of the premises.
Upon the Court granting an order for the writ of possession, the Court will command the bailiff or sheriff to enter the property and to take possession of the property for the landlord.
However, do note that a landlord is prohibited from entering the premises being occupied by the tenant without a valid Court Order allowing the landlord rightful entry to the premises. Entering and/or locking up the premises without a valid order may amount to trespass. Pursuant to the case of Abdul Muthalib Hassan v Maimoon Hj. Abd. Wahid  2 CLJ Rep 5, non-payment of rent is no justification for trespass.
In addition, in the case of Nur-Islam Wordwide Industries Sdn Bhd v Yee Kok Sum  7 CLJ 494, the High Court held that the conduct of the landlord to lock the premises rented by the tenant without a court order when the tenant defaults in rent payments is a wrongful conduct.
Even though there is a clause in the tenancy agreement between the parties to allow the landlord to regain possession of the premises, the landlord cannot defy Section 7(2) of the Specific Relief Act 1950 and Section 4 and 5(1) of the DA which require a court order before the landlord can regain possession of the premises.
Small claim procedure
Small claim procedure is an alternative available to the landlord when the amount defaulted by the tenant does not exceed RM5,000.00 but no legal representation is allowed.
Parties are to represent themselves except in circumstances where the defendant is legally required to be represented by an authorized person (i.e. the defendant is a company). Therefore, if the tenant is being sued as a company, the tenant must be represented by a lawyer pursuant to Order 12 rule 1(2) of the Rules of Court 2012 (“ROC”).
Although a company can be represented to defend a claim in the small claim court but a company cannot initiate a small claim to recover rental arrears that does not exceed RM5,000.00. Therefore, legal representation is only available to a company defending a small claim.
Despite there are various legal recourses available to the landlord with regard to the issue of rental default, it is advisable for the landlord to proceed with the first step i.e. negotiation between the parties before initiating any legal action in order to avoid the lengthy legal proceedings and cost incurred in the Court.
By: Lee Su Ting
DISCLAIMER: This article is for general information only and should not be relied upon as legal advice and/or legal opinion. Messrs Yeoh & Joanne accepts no liability for any loss which may arise from reliance on the information contained in this article.
在最近的联邦法院Rohasassets Sdn Bhd v Weatherford (M) Sdn Bhd & Anor  1 CLJ 638一案中，充分讨论了《1956年民事法法令》第28(4)(a)条下的双倍租金问题。
联邦法院法官Abdul Rahman Sebli认为收取双倍租金的决定权属于房东：-
但是，请注意，在没有有效的法院命令允许房东合法进入房屋的情况下，房东不得进入被租户占用的房屋。在没有有效命令的情况下进入和/或锁上房屋可能构成非法侵入罪。根据Abdul Muthalib Hassan v Maimoon Hj. Abd. Wahid  2 CLJ Rep 5案例，不支付租金不是一个侵入该房屋的理由。
此外，在Nur-Islam Wordwide Industries Sdn Bhd v Yee Kok Sum  7 CLJ 494一案中，高等法院认为，当租户拖欠租金时，房东在没有法院命令的情况下锁上租户租用的房屋的行为是一种不法行为。
李淑婷律师(Lee Su Ting)
免责声明:本文仅供参考，不应作为法律建议和/或法律意见。Yeoh & Joanne律师事务所不会承担因依赖本文所含信息而产生的任何损失的责任。