RTA should only be applicable in specific circumstances - REHDA

KUALA LUMPUR, March 2 -- The Real Estate and Housing Developers’ Association (REHDA) Malaysia is proposing for the Residential Tenancies Act (RTA) to only be applicable to residential tenancies where the monthly rent is below RM750 a month.

In a statement, REHDA acting president Datuk NK Tong said according to the data provided in the Regulatory Impact Statement, the rental amount is considered as the cut-off point to be classified as falling within the low and low-middle monthly rent range.

He said in principle, the association is strongly opposing the government’s intervention in what should be a private agreement between two parties.

“However, there may be situations where the tenant is at a disadvantage compared to the landlord, thus requiring a higher level of protection; for instance, if the tenant is from the B40 group, the landlord and the tenant are not on equal footing,” he said.

Tong said REHDA is also concerned about the security deposit placement with a government agency, as it could lead to delays in dealing with claims for refunds and damages due to the additional layers of bureaucracy.

Additionally, he said the Ministry of Housing and Local Government’s intention to utilise the interest earned from the deposits to fund the administration of the RTA -- including to defray the costs of managing the proposed tenant-landlord database -- is misguided, as the cost should only be defrayed from taxes collected through the nation’s taxation system.

“Interest earned on the deposits should rightly remain the property of the depositor,” he said.

At the same time, REHDA also strongly disagrees with any form of rent control, including the proposed restriction to limit the number of rent increases and to limit the quantum of rent increases, as all rental levels and renewals should only be driven by market forces.

“As there may be different requirements and demands on the property from tenants, it is only fair to leave the rental rate to be determined between the landlord and the tenant.

“Capping rent control will only retard investment in property and ultimately negatively impact economic growth,” said Tong.

He said REHDA recognises the intention behind the proposed RTA, which includes addressing some issues in the market.

“However, the Act should take into account that not all tenants and landlords have the same needs and capabilities, and require different levels of protection, particularly for tenants from the B40 group,” he said.

Meanwhile, although the proposal for the establishment of an RTA tribunal which may provide much more affordable and quicker access to justice for all parties is laudable, the process of handing down judgments should be shortened to seven days instead of the proposed 60 days.

“We also support the creation of a residential tenancy agreement template, but we hope that the template will still allow room for amendments should both landlord and tenant be agreeable to it,” he added.

-- BERNAMA