Legal Fees on Tenancy Agreements in Malaysia: A Comprehensive Guide
Tenancy agreements are a crucial component of renting a property in Malaysia, providing both landlords and tenants with legal protection and clarity on their respective rights and obligations. However, as with any legal document, there are costs involved in drafting and finalizing a tenancy agreement, including the legal fees charged by lawyers or licensed conveyancers. In this article, we will explore the various aspects of legal fees on tenancy agreements in Malaysia and provide helpful tips for tenants and landlords alike.
What are Legal Fees on Tenancy Agreements?
Legal fees refer to the charges levied by lawyers or conveyancers for their professional services in drafting, reviewing, and finalizing a tenancy agreement. These fees are regulated by the Solicitors` Remuneration (Amendment) Order 2017, which specifies the maximum amount that lawyers can charge for different types of legal work, including tenancy agreements. The fees vary depending on the value of the property, the complexity of the agreement, and the location of the property.
How Much Do Legal Fees Typically Cost?
The legal fees charged for tenancy agreements in Malaysia are typically calculated based on a percentage of the total rent payable over the tenancy period. The Solicitors` Remuneration Order 2017 sets out the following maximum fee scales for residential and commercial tenancy agreements:
– For a residential tenancy agreement, the maximum legal fee payable is 0.5% of the total rent payable over the tenancy period, subject to a minimum fee of RM300 and a maximum fee of RM2,500.
– For a commercial tenancy agreement, the maximum legal fee payable is 1% of the total rent payable over the tenancy period, subject to a minimum fee of RM500 and a maximum fee of RM5,000.
It is worth noting that lawyers or conveyancers are not obligated to charge the maximum fees set out in the Order and may charge lower rates based on the specific circumstances of the tenancy agreement.
Who Pays for Legal Fees on Tenancy Agreements?
The party responsible for paying legal fees on tenancy agreements in Malaysia depends on the terms negotiated between the landlord and the tenant. Typically, the party that initiates the drafting of the agreement will be responsible for paying the legal fees. This could be the landlord or the tenant, depending on the specific circumstances. In some cases, the legal fees may be split equally between the parties.
When negotiating a tenancy agreement, tenants and landlords should clarify who will be responsible for paying the legal fees upfront to avoid any misunderstandings or disputes later on.
Tips for Tenants and Landlords
Here are some helpful tips for tenants and landlords when it comes to legal fees on tenancy agreements:
1. Shop around for lawyers or conveyancers who offer competitive rates for their services. Ask for referrals from friends, family, or colleagues who have recently rented or leased a property.
2. Negotiate with the other party to determine who will be responsible for paying the legal fees and how much each party will contribute.
3. Read and understand the terms of the tenancy agreement carefully before signing. Seek professional advice if there are any clauses or provisions that you are unsure about.
4. Keep a copy of the tenancy agreement and all related documents in a safe place for future reference.
Conclusion
Legal fees on tenancy agreements are a necessary cost to ensure that both landlords and tenants are protected legally. By understanding how these fees are calculated and negotiated, tenants and landlords can avoid any surprises or misunderstandings when it comes to renting or leasing a property. With the above tips, both parties can work together to ensure that the tenancy agreement is fair, transparent, and legally binding.