What can you do if your landlord doesn't return your deposit, in Malaysia?

It’s been a great couple of years in that bachelor pad of yours. At times your door gets stuck, your washing machine sounds like a thousand whales dying, and your landlord can be a bitttt erratic but it has been a great run nonetheless. As you are preparing to move out, you wrap all up all your duties as a tenant; cleaned the house, repaired all the small damages you caused. Then, you drop a line to your landlord asking for your two month deposit back. He says he is on holiday so you will get it when he comes back. You shrug and move on. 

A couple months later and your deposit is still unreturned. You are getting frustrated, your texts and calls go unreturned. You’re starting to think that you’re never getting your deposit back but...is there anything you can do about it? Well, before we do that, let’s look into what you should do when renting a house.

You must sign a tenancy agreement

Some of you may choose to live life on the edge and shake on a gentleman’s agreement. While 9/10 times that might work without issues, the tenth time might put a real wrench in you. Even if you’re not looking to get into a 20-page agreement for a simple house rental, you should always make sure that the some terms are clearly laid out such as:

• How long you are renting the place for
• How much is the monthly rent
• When do you have to pay the rent by
• How much the deposit is

The above points are the bare minimum that you should have when renting a house. Even if the “agreement” is just a piece a paper you sign with the realtor, you should make sure that these terms are clearly laid out. 

In addition to that, a step further for the purposes of today’s article is to make sure that you clarify what your deposit is used for, when you would get it back, and what are the circumstances in which you might lose the right to get it back. For example, most Malaysians would be familiar with what is commonly known as the “2+1 deposit”. A 2+1 is not a term for burger Ramly double tambah cheese but it is actually a term to indicate that you would be paying two months’ deposit plus an additional month.

The two months deposit would be used to safeguard the owner against any damage that you may cause to his house. For example, if you decide to thrash the house and abscond into the night, the landlord may use the two months deposit to repair the damage. The additional month (or sometimes half a month), is used as a utilities deposit. This safeguards the landlord against any unsettled bills that you may have with TNB, for example. 

Most times, the landlord would be entitled to forfeit your deposit if you have caused damage to the house that is not from normal wear and tear (this means normal damage like small scratches are alright but if you leave a 12-foot gouge in the door then he can forfeit your deposit) or if you have failed to pay your bills. However, do bear in mind that a forfeiture does not mean that your landlord can keep every penny of your deposit as of right. He can only forfeit as much as is necessary to rectify the damage or pay the outstanding bills. For example, if your deposit is RM3000 and the cost to repair the gauge is RM500 while your outstanding bills are RM200, your landlord must return you the balance RM2300.

Now that we have gotten the basics out of the way, let’s look at what you can do if your landlord doesn’t want to return your deposit.

The first option is to sue 

A savvy AskLegal reader would put two and two together and think that when there is an agreement and a breach of its terms, there would be an action for breach of contract. For you new folks out there, a breach of contract is lawyerspeak when someone refuses to act the way they agreed to in the agreement. In law, this gives you a right to sue them. 

However, many of you would realise that lawyers don’t come cheap. On top of paying for their fees, you also have to pay the court system things like filing fees for filing your documents and the sorts. This, in a lengthy dispute, can amount to tens of thousands. Unless your deposit outweighs your lawyer’s costs, you might just write it off as bad luck and return home to rant on Facebook. 

If you are curious to read more on how to sue someone in Malaysia, click here. 

Before you get dismayed and think that this article is of zero use, we would like to introduce you to method number two; the small claims procedure which, wait for it, doesn’t require a lawyer. Here’s a catch though...

You can only use it if your claim is RM5,000 and below

What the small claims procedure is is this – if your unreturned deposit does not exceed the sum of RM5,000, all you have to do is fill up some forms and hand it to the court for you and the court will then issue a summons for your landlord to appear before a judge. 

This procedure can be found in Order 93 of the Rules of Court 2012. We have written about it in detail in this article here but as a quick recap, here’s what you have to do:

1. Make sure that your claim does not exceed RM5,000
2. Go to a local Magistrates Court (for an article explaining what a Magistrates Court is, click here)
3. Fill in the form (you can ask for help from the court’s clerks or a lawyer)
4. Attach any evidence you may have (this is not necessary but the more proof you have, the easier it is for the court to grant you what you are claiming for)
5. Send a copy of the form to your landlord (make sure you do this via AR Registered post and keep a copy of the acknowledgement to prove to court that you have sent it)
6. Show up at court on the fixed date (you are not allowed to be represented by a lawyer in a small claims procedure)

Do bear in mind that your landlord is allowed to contest (basically fight or argue against) your claim. However, so long as you have all your evidence in order, you should have no problems getting the court to rule in your favour. If you’re confused about what counts as evidence, it’s basically anything to show the court that you paid the sums you are claiming for, it was paid as a deposit, and you have not done anything to warrant a forfeiture of that deposit. Usually this would take the form of your tenancy agreement (hint, hint), any bank transaction slips, and proof that all your bills are settled and/or the house is undamaged. 

Should the Magistrate agree that your landlord is not supposed to keep your deposit, he will be ordered to return it. If he refuses to comply with the court order, the court can even issue a warrant for his arrest or issue what is known as a writ of seizure and sale (which allows court officials to seize your landlord’s items and sell it off in order to pay what he owes you). 

[READ MORE: If someone borrows money and doesn’t pay you back, Malaysian law can help]

We know that some of you may be groaning over the fact that the small claims procedure is only limited to claims of RM5,000 and below but it would seem like the small claims procedure is meant to make the court system more accessible and generally speaking, the larger the claim, the more difficult it is. 

At the end of the day, regardless of whether you are hiring a lawyer or tackling the DIY claims form, you must remember to do one small thing:

Document everything. Every. Thing.

To avoid situations where your landlord and you argue over whether you left that burnt mark on the counter, always remember to take pictures of your house when you first move in. Focus on defects and bring them to your landlord’s attention. Take pictures again as you’re moving out. Then, save everything to a cloud based storage drive so that your landlord and you can easily solve the whodunnit question if anything is damaged.

Other than that, always remember to clarify how long it would take for your deposits to be returned after you move out. Logically speaking, the deposit for the condition of the house should be returned as soon as your landlord checks the house while the utilities deposit would be return as soon as your last month’s bill is cleared. Last but not least, it’s best to get everything down in writing; while unwritten contracts are enforceable, it’s always clearer in writing. 

[READ MORE: Is it safe to write your own DIY contract in Malaysia (or sign one)?]