The Ministry of Housing and Local Government's (KPKT) proposed Residential Tenancy Act (RTA) contains incomprehensible sections and should be reconsidered (HBA) to protect property owners, according to the National Homebuyers Association.
Datuk Chang Kim Loong, Honorary Secretary-General of the HBA, said that not only are some of the laws unnecessary, but they may also be harmful to the average property owner, particularly in the current challenging environment.
Chang said that in order to avoid disharmony and social issues in Malaysia, more robust discussions and in-depth studies are required prior to the enactment of any rental law.
"The proposed RTA has been a hot topic of discussion since two years ago, and what is even more surprising is that Malaysia has never had any specific laws or acts governing landlords and tenants," Chang told NST Property.
Currently, there is no tribunal for issues relating to housing rental.
According to KPKT, the RTA will be a milestone for the local rental market as it will help protect tenants and property owners/landlords from any dispute that might arise for the duration of the rent.
Chang suggested that the government get more feedback about the RTA before the proposed law is tabled in Parliament.
If the law is passed, the 2+1 security deposit (two-month rental and one-month utility) that is currently required for most rental tenancies in Malaysia will no longer be held by landlords and will instead be deposited in a yet-to-be-identified Government agency.
Chang said that, according to page 36 of the KPKT report (clause B), the newly-minted Comptroller of Residential Tenancy would be authorised to manage security deposits (parked under a neutral agency) to ensure that the authorities could address any conflict that arose between landlords and tenants.
If there are no expenses to deduct from the security deposit, it will be returned to the tenants when the tenancy agreement expires.
Chang said, if there is a disagreement, the matter will be referred to the tribunal, and the process could be lengthy.
According to Chang, some sections of the RTA bill are perplexing and may not be accepted by the average person on the street.
"The government is interfering in the market economy when there is no need for such government interventions. This meddling would only drive away investors. In the current post-pandemic period, the government should prioritise macroeconomic issues that can aid in economic recovery. At this point in time, the RTA is actually superfluous," he said.
Chang also brought up the issue of how the proposed RTA's survey was conducted.
The government had conducted a survey in order to gain justification for regulating landlord-tenant relationships through the RTA. However, the survey drew 3,119 respondents from the country's 32.4 million population.
"This represents only 0.009 per cent of the total population and was limited to Selangor, Klang Valley, and Putrajaya. Property stakeholders in many other Malaysian cities, towns, and states were never interviewed.
"We also discovered that 65 per cent of the respondents, or 2,015 people, were tenants, while only 1,104 were landlords. According to my observations, the survey results are heavily skewed toward the tenants' interests, and it also excludes other states and demographic groups.
"Furthermore, about 87 per cent of survey respondents are of Malay ethnicity. Only 13 per cent of has been allocated to other races. KPKT previously stated that the RTA will place a special emphasis on curbing 'racist' practises by certain landlords. This new law has the potential to open a whole new can of worms," Chang said.
Chang questioned the survey's validity and significance, as well as whether it included a representative sample of the T20, M40, and B40 age groups.
He said there was also no indication whether those interviewed covered both local landlords and foreign owners, and were from different educational backgrounds.
"Was the survey conducted both in rural and urban areas? What was the majority of the feedback from the 3,119 respondents? Do we honestly believe that a survey of this nature can be considered comprehensive enough to justify enacting a rental law that governs the entire Peninsular Malaysia? The survey should be transparent," he said.