Tenancy Agreement in Malaysia (2026): What to Check + Free Checklist

A tenancy agreement in Malaysia must spell out four things clearly: the rent and how it is paid, the deposits and how they are refunded, the fixed term and renewal, and exactly who is responsible for what. Before you sign, the three clauses that cause the most disputes later are the deposit clause, the early-termination (diplomatic) clause, and the inventory list. After signing, you have 30 days to stamp it with LHDN, otherwise the document cannot be used as evidence in court. That is the short version. Below is the detailed version, with the current stamp duty numbers, a cost table, and a pre-signing checklist you can copy.

One thing to set straight first. Malaysia has no Residential Tenancy Act (RTA). It has been “in drafting” for years, and as of 2026 the Housing Ministry says it is still in drafting with no tabled bill or gazette date (Low & Partners). What this means in practice: your tenancy is governed by contract law and the agreement you sign, not by a dedicated tenancy statute. There is no statutory deposit cap, no tenancy tribunal, and no standard form mandated by law. The contract is doing all the work. So read it.

What must a Malaysian tenancy agreement cover?

A workable agreement is not long, but it must be complete. In our view, an agreement missing any of the items below is not ready to sign. These are the load-bearing clauses.

Section	What it must state	Why it matters
Parties	Full names, IC or passport numbers, addresses of landlord and tenant	Identifies who can enforce and who is liable
Property	Full address, unit number, parking lot, what is included (furnished or not)	Defines exactly what you are renting
Term	Start date, end date, fixed term (commonly 1 or 2 years)	Sets the lock-in and the renewal window
Rent	Monthly amount, due date, payment method, late-payment interest	Removes ambiguity on the single biggest issue
Deposits	Security, utility, and advance amounts, and refund conditions	The most common source of move-out disputes
Responsibilities	Who pays for repairs, maintenance, utilities, assessment and quit rent	Splits cost and duty between the two parties
Termination	Notice period, the diplomatic clause, default and re-entry rights	Governs how either side exits early
Inventory	Itemised list of fixtures, fittings, appliances and their condition	Decides whether the deposit comes back

A renewal clause and a clause on subletting are useful additions. So is a clause that names the early-termination notice period in writing rather than leaving it to “reasonable notice”, which means nothing in a dispute.

How is stamp duty on a tenancy agreement calculated in 2026?

Stamp duty is a tax LHDN charges to make the agreement admissible as evidence. It is calculated on the annual rent, charged per RM250 (or part of RM250), and the rate steps up with the length of the lease (Richard Wee Chambers).

Tenancy term	Stamp duty rate (per RM250 of annual rent)
1 year or less	RM1
More than 1 year, up to 3 years	RM3
More than 3 years, up to 5 years	RM5
More than 5 years	RM7

These rates were revised upward by the Finance Act 2024, effective 1 January 2025, which is what most renewals signed in 2026 fall under. In the same change, the old exemption on the first RM2,400 of annual rent was removed, so the full annual rent is now dutiable from the first ringgit (Thannees). A minimum duty of RM10 applies where the calculated duty is below that, and each additional copy of the agreement is stamped at a flat RM10.

The formula for the most common case, a 1 to 3 year lease:

Annual rent ÷ 250, rounded up, × RM3 = stamp duty.

Worked examples on indicative Klang Valley rents (approximate, check current listings, ranges via iProperty).

Monthly rent	Annual rent	1-3 year stamp duty (RM3/RM250)
RM1,200	RM14,400	RM174 (14,400 ÷ 250 = 57.6 → 58 × 3)
RM1,800	RM21,600	RM261 (21,600 ÷ 250 = 86.4 → 87 × 3)
RM2,500	RM30,000	RM360 (30,000 ÷ 250 = 120 × 3)
RM4,200	RM50,400	RM606 (50,400 ÷ 250 = 201.6 → 202 × 3)

Always round the division up to the next whole number before multiplying, because LHDN charges per RM250 “or part thereof”. Rates do change, so confirm the current figure against LHDN’s stamp duty page before you pay.

What else does the tenancy cost beyond stamp duty?

Stamp duty is only one line. Two others apply: legal or drafting fees, and an administration fee for preparing the agreement. The legal fee for tenancies broadly follows a scale of about 25% of one month’s rent on the first RM10,000 of annual rent and 20% of one month’s rent on the next RM90,000, with anything above RM100,000 negotiable (iProperty). Administration fees from agents or property managers run roughly RM100 to RM300 depending on rent (approximate).

By convention, the landlord pays for drafting the agreement, the tenant pays to vet it, and the tenant pays the stamp duty and stamping cost. None of this is fixed by law, so negotiate it openly before you sign rather than assume.

Cost item	Who usually pays	Indicative amount
Stamp duty	Tenant	Per table above (RM10 minimum)
Additional stamped copy	Tenant	RM10 each
Drafting / legal fee	Landlord (convention)	~25% of one month’s rent on first RM10k annual
Agreement vetting	Tenant (convention)	By arrangement with the lawyer
Admin / agency fee	Varies	RM100 to RM300 (approximate)

How do you stamp a tenancy agreement, and what is the deadline?

You stamp through LHDN’s e-stamping system (STAMPS), or at a stamp duty counter. Both physical and digital stamping are equally valid once duty is paid in full.

The hard rule: stamp within 30 days of signing (or within 30 days of first receipt in Malaysia if the agreement was signed overseas). Miss it and penalties apply under Section 47A of the Stamp Act 1949, on a tiered scale: RM25 or 5% of the deficient duty (whichever is higher) if you stamp within 3 months late, RM50 or 10% if you stamp between 3 and 6 months late, and RM100 or 20% beyond 6 months (Donovan & Ho). A temporary penalty waiver (PKPS 2026) applies to certain late instruments stamped during a 2026 window, so check whether yours qualifies before paying any penalty.

The bigger consequence is legal. Under Section 52 of the Stamp Act 1949, an unstamped agreement cannot be admitted as evidence in court. The contract is still valid and enforceable in principle, but you cannot rely on it in a dispute until the duty and any penalty are paid. For a document whose whole purpose is protection, that is a fatal gap. Stamp it on time.

What deposits are normal, and what should the deposit clause say?

The market norm in Malaysia, often written as 2 + 1 + 0.5, is two months’ rent as security deposit, one month as advance rent, and half a month as utility deposit (iProperty). That is about 3.5 months of rent upfront. The security deposit covers damage beyond fair wear and tear and breach of the lease; the utility deposit covers outstanding TNB, water, and sometimes internet bills; the advance rent is applied to the first month and is usually non-refundable if you back out after signing.

There is no statutory cap, so 3 + 1 is legal but tends to narrow the landlord’s pool of tenants. For a tenant, the deposit clause is the single most important clause to read, because deposit recovery is the most common dispute in a market with no tribunal. A good clause states: the exact amounts, the timeline for refund after move-out (14 to 30 days is reasonable), what can and cannot be deducted, and that fair wear and tear is excluded from deductions. Vague wording here is where deposits go to die.

What is a diplomatic clause and why does it matter?

The diplomatic clause, also called the early-termination clause, lets the tenant end the lease before the fixed term without forfeiting the full deposit, provided conditions are met. It originated with expat postings (hence “diplomatic”), but it is now common for any tenant who may be relocated. A typical version allows termination after the first 12 months of a 24-month lease, with 2 months’ written notice, often on condition the tenant covers the landlord’s cost of finding a replacement.

If your circumstances could change, in our view this clause is non-negotiable. Without it, breaking a fixed-term lease early usually means losing the security deposit and potentially being liable for rent until the end of the term. Read what triggers it, how much notice it needs, and whether it is mutual or tenant-only.

What is an inventory list and who is responsible for what?

The inventory list (or inventory schedule) is the itemised record of everything in the unit and its condition at handover: furniture, appliances, fixtures, even the state of the walls and floors. For a furnished unit it is essential. It is the evidence that decides whether scratches and stains existed before you moved in. Photograph everything on the day you collect the keys, date the photos, and attach the list as a schedule to the agreement signed by both parties.

Responsibilities split roughly as follows, and the agreement should state it explicitly rather than leave it to assumption.

Item	Landlord	Tenant
Quit rent and assessment (cukai tanah, cukai pintu)	Yes	No
Building maintenance / service charge / sinking fund	Yes (usually)	No
Major / structural repairs	Yes	No
Utilities (electricity, water, internet)	No	Yes
Minor repairs and consumables (light bulbs, fuses)	No	Yes
Fair wear and tear	Yes (absorbs it)	No
Damage caused by tenant	No	Yes
Fire insurance on the building	Yes	No
Contents insurance on tenant’s belongings	No	Yes (optional)

Where the line sits between “minor” and “major” repairs is the grey area, so a sensible agreement sets a ringgit threshold, for example the tenant covers repairs under RM200 and the landlord covers anything above.

Pre-signing checklist

Run through this before you sign anything or pay any deposit.

• Names and IC or passport numbers of both parties are correct and complete.
• Property address, unit, and parking bay are stated exactly.
• Furnished or unfurnished is specified, with an inventory list attached.
• Monthly rent, due date, payment method, and late-payment interest are stated.
• Deposit amounts (security, utility, advance) are itemised, with refund timeline and deduction rules.
• Fair wear and tear is explicitly excluded from deposit deductions.
• Fixed term, start and end dates, and any lock-in are clear.
• Diplomatic / early-termination clause is present, with notice period and conditions.
• Notice period for non-renewal is stated for both sides.
• Responsibilities for repairs, utilities, quit rent, assessment, and maintenance are split clearly.
• Subletting and renewal terms are addressed.
• You have photographed the unit’s condition on the day of handover.
• The agreement will be stamped via LHDN within 30 days of signing.
• You know who is paying stamp duty, drafting, and admin fees.

Verdict

A tenancy agreement is the only real protection you have in a country that still does not have a Residential Tenancy Act. Treat it accordingly. Get a written agreement, never a handshake. Read the deposit clause, the diplomatic clause, and the inventory list more carefully than anything else, because those three decide who wins the disputes that actually happen. Budget the full 3.5 months upfront plus stamp duty, and stamp it through LHDN within 30 days so it holds up if you ever need it.

This guide is best for tenants and small landlords arranging a standard residential lease in the Klang Valley or elsewhere in Malaysia. It is not a substitute for legal advice, and it is not for commercial leases, master tenancies, or anything involving a sublet structure, which carry tax and liability issues this article does not cover. If your rent is high, your situation is unusual, or a lot of money is at stake, pay a lawyer to draft and vet the agreement. This is educational only and not legal or tax advice; confirm the current stamp duty rate with LHDN and consult a licensed lawyer or agent for your specific situation.