Rental deferment up to landlord-tenant deal

Tenancy or lease agreement creates a contractual relationship between the landlord and tenant and any deduction or deferment of rental has to be agreed by both parties

by FARA AISYAH/ pic by BERNAMA

MANY tenants, especially in the commercial segment, are urging landlords to give rental deferment as the Covid-19 pandemic continues to impact their businesses.

Residential tenants have also raised their concerns on the issue as landlords are given a six-month automatic deferment of mortgages.

Teh Kim Teh, Salina & Co Sdn Bhd senior partner Datuk Dr Teh Tai Yong said many companies, particularly the small and medium enterprises (SMEs) have difficulties paying rent during this pandemic.

“Tenancy or lease agreement creates a contractual relationship between the landlord and tenant. Any deduction or deferment of rental has to be agreed by both parties.

“A deferment scheme may be made through restructured rental payments, as this is crucial for tenants to rebuild their businesses during this tough time,” he told The Malaysian Reserve.

Teh, who is also a landlord, said the obligation to pay rental for residential properties continues because the tenants are still using and occupying the space.

However, he said, the parties are advised to check whether there is a force majeure clause in the tenancy agreement to suspend the payment of rental during emergencies.

Landlord Charles Tan said owners should consider giving rental deferment to good tenants who are financially struggling during the Covid-19 crisis.

“If the landlords lose this good tenant, it will take a long time to find another one. It is up to the landlord-tenant relationship.

“Personally, if my tenant is facing financial difficulties, I have no issues to waive or at least give a huge discount, like 50%, for example,” he said.

Tan, CEO of TEN Auctioneers Sdn Bhd, added that tenants must also understand that the moratorium means postponing the current six months’ instalment to a future date — but landlords still have to pay their mortgages.

He also said the rental deferment is a suggestion from the government and not a regulation.

Earlier this month, Prime Minister (PM) Tan Sri Muhyiddin Yassin announced that landlords who waive or reduce rent for SMEs by at least 30% will receive the equivalent in tax deductions.

“I would like to urge private companies to provide similar facilities by reducing rent at their premises, at least for the duration of the Movement Control Order and the following three months.

“Property or commercial space owners who waive or reduce rent to SMEs will enjoy additional tax deductions equivalent to the amount for the month of April until June 2020,” the PM said.