Sunday, 31 July 2011

Tenancy Agreements and Deposits

Through my very good friend and property agent Catherine Loh I was fortunate to find a rental quite quickly upon my return to Penang and I will be moving into the apartment in a few days time. Catherine was excellent in sorting the documentation out most of which seems to be done using fairly standard forms. I do trust Catherine 100% (which always helps) so had no issues with accepting the documentation after reading it through.

This update is merely to provide an indication of the process and the costs at the initial stages of rental. Having viewed the apartment and decided to opt for it I met the landlord with Catherine after he confirmed acceptance of my offer. I decided to go for a 2 + 1 year rental while I wait for my apartment to be built as it gives me piece of mind for two years and the option of a third. The block is very well located strategically so I'm happy with that choice. We ran through the draft of the Tenancy Agreement (TA) and each of us signed and initialled each page. I paid a small deposit (RM 500) in cash for which the landlord gave a receipt, this was to take the property off the market. While we were there Catherine made full notes of the inventory at the property.

Following this Catherine took the TA to get it stamped and registered (for which there is a charge of RM 250, or around RM 125 if a one year agreement) and I commenced transferring the funds I needed to the landlord's account direct by internet banking (MEPS-GIRO) via HSBC. The common arrangement seems to be:

a) Two months rental as a deposit which will be returned at the end of the lease subject to damage inspections and such like (or you may be able to offset this against your last two months of rental)

b) The first month rental, paid in advance (tenancies generally starting from the 1st)

c) A utilities deposit of RM 1,300, normally equivalent to half a month's rental, again which is returned at the end of the lease if you have paid all your bills!!

I also opted to pay the monthly rental thereafter on the first of each month by using the auto-pay facility at the bank direct into the landlord's account. In all cases, regardless of receipts, this provides a good audit trail of payments and takes away the hassle of having to be around on the first of each month to pay your rent!!

On the subject of direct money transfers, bear in mind that as a non-local (and even an MM2H visa doesn't change this) you will be subject to an RM 5,000 per day limit on direct bank transfers so will need to factor this in if the amount you need to pay exceeds this. For peace of mind I also did a minimal initial transfer to the landlord's account and asked him to confirm receipt by SMS prior to my doing the full amount.

Once the transfers were complete we all met up at the apartment again and were provided with our copies of the stamped TA. We also ran through the inventory attached to each of the TAs and checked all items were working etc., making a note of any matters yet to be finalised/completed (e.g. further key card to follow, adjustment needed to kitchen cupboard for gas bottle for the cooker). Finally, we jointly took and noted (on each TA) the meter readings for the water and electric which in my case, are accessed in a utility room on the apartment floor.

One thing which is useful is to note which telco line your block is served by for the information of the internet/landline company you intend to use. In my case the line is Centrex and I plan to go with TM Streamyx (further update to follow). They will also use this information to check the broadband speed you are able to receive.

So that's it, all fairly straight forward but at least this post provides an overview of the process and the sums of money you will need to pay over initially. Happy house-hunting!! Finally, if anyone is looking for a very good agent I cannot recommend Catherine Loh highly enough. Contact me direct via the blog email link or from my profile page if you wish to be put in touch (this is merely to prevent spammers).

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