What Can Landlord Deduct From Security Deposit?

As a tenant in Malaysia, understanding your rights and responsibilities when it comes to security deposits is crucial.

Security deposits are a common practice in the rental market, meant to protect landlords from potential damages or unpaid rent. However, landlords can only deduct certain items from the deposit, and it's important for tenants to know what these are.

In this blog post, we'll explore the various deductions landlords can make from security deposits in Malaysia, as well as your rights as a tenant.

By understanding the legal guidelines around security deposit deductions, you can ensure your hard-earned money is protected and avoid any disputes with your landlord.

What is a Security Deposit?

A security deposit is a sum of money that a tenant pays to a landlord at the start of a tenancy agreement.

This deposit acts as a safeguard for the landlord, covering any potential damages to the rental property or unpaid rent. The deposit is typically equal to one to three months' rent, depending on the landlord's requirements.

When the tenancy agreement ends, the landlord is expected to refund the full security deposit to the tenant, provided there are no outstanding issues.

However, landlords have the right to make deductions from the deposit to cover certain expenses, as outlined in the Residential Tenancies Act 1999.

Legitimate Deductions from Security Deposits in Malaysia

According to Malaysian law, landlords can only deduct from a tenant's security deposit for the following reasons:

1. Unpaid Rent

If a tenant fails to pay the agreed-upon rent during the tenancy, the landlord can deduct the outstanding amount from the security deposit.

This ensures the landlord is compensated for any lost rental income.

2. Damage to the Property

Landlords can deduct the cost of repairing any damage to the rental property that exceeds normal wear and tear.

This includes damages to walls, floors, fixtures, and appliances.

However, landlords cannot deduct for minor, cosmetic issues like scuffs or small nail holes.

3. Cleaning Costs

If the tenant leaves the property in an excessively dirty condition, requiring professional cleaning, the landlord can deduct the cost of this cleaning from the security deposit.

4. Replacement of Missing Items

If the tenant has lost or failed to return any items provided by the landlord, such as keys or remote controls, the landlord can deduct the cost of replacing these items from the security deposit.

5. Unpaid Utility Bills

If the tenant has not paid their share of utility bills, such as electricity, water, or internet, the landlord can deduct the outstanding amount from the security deposit.

It's important to note that landlords cannot make deductions for normal wear and tear on the property, which is considered a natural result of the property being lived in.

They also cannot deduct for any pre-existing issues or damages that were present before the tenant moved in.

Tenant Rights Regarding Security Deposit Deductions

As a tenant, you have certain rights when it comes to security deposit deductions:

Detailed Accounting: Landlords must provide a detailed, itemized account of any deductions made from the security deposit, along with supporting documentation (e.g., receipts, invoices).
Timely Refund: Landlords are required to refund the remaining security deposit within 14 days of the tenancy agreement ending, provided there are no outstanding issues.
Dispute Resolution: If you disagree with the landlord's deductions, you have the right to dispute them. This can be done by contacting the landlord directly or, if necessary, seeking assistance from the Tribunal for Homebuyer Claims.
Inspection Walkthrough: Before moving out, you have the right to request a joint inspection walkthrough with the landlord to assess the condition of the property and identify any potential issues.
Proper Notification: Landlords must provide proper notification (typically 30 days) before the end of the tenancy agreement, allowing you to prepare for the move-out process.

Tips for Tenants to Avoid Security Deposit Deductions

To minimize the risk of security deposit deductions, here are some tips for tenants:

Thoroughly Inspect the Property: Before moving in, conduct a thorough inspection of the rental property and document any pre-existing issues or damages. This will help you avoid being held responsible for them later.
Maintain the Property: During your tenancy, take good care of the property and address any minor issues promptly. This will help prevent larger, more costly damages.
Clean Thoroughly: When moving out, ensure the property is left in a clean and tidy condition, as per the landlord's expectations. This will help avoid any deductions for cleaning costs.
Return All Items: Make sure to return all items provided by the landlord, such as keys and remote controls, to avoid replacement costs being deducted from your security deposit.
Pay Bills on Time: Ensure all utility bills are paid in full before the end of the tenancy to avoid any outstanding amounts being deducted from your security deposit.
Document Everything: Keep detailed records of your rental payments, any communication with the landlord, and the condition of the property throughout your tenancy. This documentation can be valuable if you need to dispute any deductions.
Communicate with the Landlord: If you have any concerns or questions about the security deposit deductions, don't hesitate to discuss them with your landlord. Open communication can often help resolve issues before they escalate.

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Conclusion

Understanding your rights and responsibilities as a tenant in Malaysia when it comes to security deposit deductions is crucial.

Landlords can only deduct from the deposit for specific reasons, such as unpaid rent, property damage, cleaning costs, and missing items.

As a tenant, you have the right to receive a detailed accounting of any deductions, as well as a timely refund of the remaining deposit. If you disagree with the landlord's deductions, you have the option to dispute them through the proper channels.

By being proactive, maintaining the rental property, and communicating openly with your landlord, you can minimize the risk of security deposit deductions and ensure a positive rental experience.

Remember, your security deposit is your money, and it's important to protect it.

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About the Author

Danny H

Seasoned sales executive and real estate agent specializing in both condominiums and landed properties.