When you are in the property rental business, you can be certain that you will eventually encounter challenging situations that you may not have anticipated. Most rental arrangements begin simply enough: a property owner appoints a property management office (PMO), a tenant signs a tenancy agreement, rent is paid every month, and everyone goes about their daily lives.
However, things can become complicated very quickly when rental payments stop, tenants refuse to leave, or other people living in the property are not clearly covered by the tenancy agreement.
The following is a real-life case involving an apartment in Selangor. The names used are fictional. Let us call the tenant Bob and his housemate Bill.
This case provides an important lesson for both property owners and property management offices: having a tenancy agreement and a management arrangement is only the beginning. Having a clear process for dealing with problems is equally important.
The apartment owner had appointed a property management office (PMO) to manage the rental of his property. The PMO subsequently rented the apartment to Bob.
Bob was the named tenant, but he was also staying in the apartment with his housemate, Bill.
Initially, everything appeared to be normal. However, after some time, Bob stopped paying rent. The rental arrears continued to accumulate for several months.
Eventually, the owner decided that he wanted Bob to vacate the property and instructed the PMO to take the necessary steps.
What appeared to be a straightforward landlord-tenant dispute soon became more complicated because Bill was also living in the apartment.
Bob and Bill refused to move out. The owner then instructed the PMO to block the access cards that they were holding. The owner also made a police report concerning the situation.
The expectation was that restricting access to the apartment compound and involving the police would encourage the occupants to leave. However, this had little effect.
Although their access cards had been blocked, Bob and Bill still had the physical keys to the apartment. They were therefore able to remain inside the unit.
This highlights an important issue for property owners and PMOs: controlling access to a building is not necessarily the same as recovering possession of the apartment itself.
The situation continued until the owner eventually decided to disconnect the electricity and water supply to the unit.
This had the desired effect on Bob. Within a day or two, Bob left the apartment. Bill, however, remained.
Bill approached the property manager and requested a few more days, explaining that he had belongings in the apartment that he needed to remove. The PMO and owner agreed to give him additional time.
However, it soon became apparent that Bill was not simply taking additional time to remove his belongings. He apparently did not have another place to stay and therefore continued remaining in the apartment.
The PMO informed the owner of the situation and obtained approval to prevent Bill from entering the apartment again after he left. Eventually, Bill left the apartment to attend to his daily errands.
When he returned, security officers had been instructed not to allow him back into the apartment compound. An argument subsequently developed between Bill and the security personnel. Bill then made a police report and returned with the report.
Security maintained their position that Bill would not be allowed to enter unless accompanied by the authorities.
Eventually, the police arrived and accompanied Bill to the apartment. Bill collected his belongings and finally left the property.
The situation had ended, but only after the involvement of the owner, PMO, security personnel and police.
There are lessons for both the property owner and the property management office. From the owner's perspective, it is understandable that someone who has not received rent for several months would want to recover possession of the property as quickly as possible. Rental arrears can cause significant financial losses, particularly when the owner still has to pay a mortgage, maintenance fees and other property expenses.
However, frustration can sometimes result in owners taking immediate measures without fully considering the consequences.
In this case, blocking access cards and disconnecting utilities appeared to be attempts to encourage the occupants to leave. While these actions eventually resulted in Bob leaving, property owners should be cautious about relying on self-help measures when dealing with a tenancy dispute. The appropriate steps can depend on the tenancy agreement and applicable Malaysian law, so professional advice may be appropriate before taking enforcement action.
The PMO also had an important responsibility.Because the owner had appointed the PMO to manage the property, the PMO should ideally have had a clear procedure for dealing with rental arrears, unauthorised occupants and the recovery of possession.
The biggest difficulty in this case appears to have been Bill's position. Was Bill named in the tenancy agreement? Had the owner approved him as an occupant? Was he paying rent? Did the PMO know that he was living there?
These questions should ideally have been answered before the problem occurred.
There are several practical steps that can help reduce the risk of a similar situation.
The owner and PMO should know exactly who will be living in the property. If a tenant intends to live with another person, that person should be declared and, where appropriate, registered as a co-tenant or approved occupant.
The agreement should clearly state the names of the tenant or tenants, approved occupants, rental payment dates, termination requirements, rules concerning additional occupants, subletting, keys and access cards, and the process for handing the property back.
A PMO should have a standard process for overdue rent.
For example:
Rent overdue → reminder → formal notice → payment deadline → escalation according to the tenancy agreement and applicable law.
Addressing arrears early may prevent a relatively small problem from becoming a major dispute.
Important discussions should not rely solely on telephone conversations or verbal promises. If an occupant is given additional time to vacate, the PMO should document the agreed date and conditions clearly. This would provide everyone with a common understanding of what has been agreed.
The PMO should maintain records of rental payments, arrears, notices, communications, inspections, occupants, keys and access cards. Good documentation can be extremely valuable if disagreements arise.
When a tenant refuses to leave, the PMO should have a predefined procedure involving the owner, building management and, where necessary, professional legal advice. Security personnel should also receive clear instructions. They should not be expected to determine complicated tenancy disputes themselves.
This incident demonstrates that property management is about much more than collecting rent and finding tenants. A property owner is managing a valuable financial asset, but that asset is occupied by people. When something goes wrong, the situation can quickly involve tenants, other occupants, the PMO, building management, security personnel and even the police.
In this case, Bob eventually left, but Bill remained because his circumstances were different. What started as a rental-payment problem eventually became an access and occupancy dispute.
The lesson for property owners is to act early, maintain proper documentation and understand the appropriate process before a dispute occurs.
For PMOs, the lesson is to establish clear procedures for tenant screening, approved occupants, rental arrears, notices, property access and handover.
A difficult tenant situation may sometimes be unavoidable. However, a difficult situation becoming a chaotic one can often be prevented
The best time to establish a rental dispute procedure is before you have a dispute.
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