FREQUENTLY ASKED QUESTIONS…
WHICH AREA ARE MOST MULTINATIONALS & CORPORATE HEADQUARTERS LOCATED?
Most multinationals are located in the KLCC area, either in the Petronals Twin Towers or the buildings surrounding it.
WHAT IS THE MINIMUM TERM OF TENANCY ALLOWED ?
Most buildings have a minimum tenancy period of 2 years with an option to renew for 1 further year. A longer tenancy period will allow for the tenant to lock in the rental rate in a growing property market.
WHAT IS THE DIFFERENCE BETWEEN A TENANCY AND A LEASE?
If the contract term is three (3) years or less, it is called a tenancy. If the contract term is beyond three (3) years, it is called a lease. Legally, leases are registrable with the Land Office and the lessees have a registered interest in the land upon registration.
IN A TENANCY AGREEMENT OF 2 + 1 YEARS, WHOSE OPTION IS IT TO RENEW THE TENANCY, THE TENANT OR LANDLORD?
It is the tenant’s option to renew.
WHO PREPARES THE TENANCY AGREEMENT?
The tenancy agreement is prepared by the landlords lawyers.
WILL I NEED TO PAY FOR PREPARATION OF THE TENANCY AGREEMENT?
Legal fees, though prepared by the landlords’ lawyers are borne by the tenant.
WHY DOES THE TENANCY AGREEMENT NEED TO BE STAMPED?
The stamp duty collected is a form of tax imposed by the Government of Malaysia. It is necessary for a tenancy agreement to be stamped so that it can be used and tendered as evidence at any Court of Law in Malaysia.
HOW IS THE STAMPING FEE CALCULATED?
The stamping fee calculation is based on the amount of monthly rental payable and also the tenancy period. The formula is as below.
Yearly rental minus 2400 (as the first 2400 is not taxable) divided by 250. The amount is then multiplied by the number of years. RM10 is added for the landlords copy. The total amount is payable by the tenant.
WHAT KIND OF PAYMENTS NEED TO BE MADE IN A TENANCY?
The tenant will have to pay 1 month advance rental (ernest deposit) to secure the premises, 3 months security deposit, 1 month utility deposit, both deposits are refundable at the end of the tenancy period without interest providing all outstanding bills are paid and the premises is in good tenantable condition. Aside from that, the tenant will also have to pay for stamping (as below) and a renovation deposit as determined by the landlord.
WHAT IF THE TENANT/LANDLORD TERMINATES THE TENANCY AGREEMENT BEFORE THE AGREED TERM?
Essentially, the tenancy will require the injured party be compensated for the remainder of the tenancy, but depending on the landlord there might be an exit clause that will see the injured party compensated at least 3 months rental, giving them enough time to find a new tenant/premises and covering losses.
WHAT UTILITIES DOES THE TENANT HAVE TO PAY FOR?
The tenant is required to pay for the electricity consumption, telephone usage, internet subscribtion, statelite tv and water if any and indah water. Maintenance of the building/common areas are already factored into the rental.
WHAT DOES A BARE OFFICE SPACE MEAN? SEMI FURNISHED? FULLY FURNISHED?
A bare office space essentially comes with cement rendered flooring and suspended ceiling.
A semifurnised office in most cases has carpeting and partitions in place, this is usually laid out by the landlord to give tenants the option of saving time and money doing it at their own cost.
A fully furnished office is in ready to move in condition. In most cases this kind of office space comes about because the previous/outgoing tenant would have most likely with the consent of the building management not incur the expenses of stripping all fittings out and instead recover a residual value from the sale of it.
REINSTATEMENT OF THE PREMISES
Most tenancy agreements unless otherwise stated requires the tenant to reinstate the office to a bare space. This is done at the cost of the tenant.
DO ALL BUILDINGS COME WITH CENTRAL AIRCONDITINONG?
No, not all buildings have central airconditioning. This is especially prevalent in office spaces that have been sold on strata. In this case, tenants will have to install split unit airconditioning, and they bear the cost of usage seperately.
WHAT ARE THE HOURS OF OPERATION AND CHARGES FOR CENTRALISED AIR CONDITIONING?
Buildings that have central air conditioning generally provide air conditiong between 8am – 6pm on weekdays and half day on Saturday (varies with each building) The charge for airconditiing usage during these hours is factord into the rental. Usage after hours on the other hand is charged on a per hour basis and this is can cost anything between RM100 -RM150 per hour.
CAN SPLIT UNIT AIR CONDITIONING UNITS BE INSTALLED IN BUILDINGS THAT PROVIDE CENTRAL AIR CONDITIONING?
This is dependent on the individual buildings, older buildings do not have the space or infrastructure to allow installation of compressor units on the façade.
WHO PAYS FOR FIXTURES THAT NEED TO BE CHANGES FOR EXAMPLE LIGHTS?
Before the premises is handed over to the tenant, both tenant and landlord will have an inspection to determine the quantity and condition of all fixtures and fittings. A detailed inventory list will be produced by the landlord and signed by both parties. At the time of handing over the keys, every aspect of the premises is understood to be in good tenantable condition. After the premises is handed over, the responsibility of up keep and maintenance within the premises is then shifted to the tenant.
DOES THE SPACE I OCCUPY IN THE BUILDING ASCERTAIN MY CARPARK ALLOCATION
Yes, all buildings allocate parking spaces based on total floor space occupied, eg. 1 bay per 1000 sq ft. Additional spaces are allocated based on availability.
DO WE HAVE TO PAY FOR THE ALLOCATED PARKING SPACES OR ARE THEY FREE?
The parking spaces are only an allocation, a monthly fee has to be paid. The fee varies from building to building.
WHAT DOCUMENTS ARE NEEDED WHEN SIGNING A TENANCY AGREEMENT?
Certified true copies of business registration documents need to be handed over to management, as below:
Form 9 – Business Registration Certificate
Form 24 – Particulars of Shareholding
Form 44 – Registered Office Address
Form 49 – Particulars of Directors & Secretaries
Memorandum & Articles of Association (for Sdn Bhd)
DO BUILDING OWNERS/MANAGERS PROVIDE A FIT OUT (RENOVATION) PERIOD?
Yes most buildings provide a rent free period of 1 month depending on the size of the unit and the extent of renovation needed.