Property investment is the hype but property nightmares are often shoved under the carpets. In this series of Property Nightmare Stories, PropertyGuru gets down on the ground to find out firsthand what can happen when the tenant or landlord voids a contract.
In June of 2016, Johnny, the tenant has entered into a fixed tenancy for 12 months with Hassan, the landlord. What this means is that if Johnny wishes to terminate the tenancy earlier, Johnny has to compensate Hassan in terms of rental payment for the remaining unexpired term of the tenancy.
Unfortunately, due to personal issues, Johnny was unable to pay the rental payment few months down the tenancy. Knowing the fact that his tenancy is a fixed one, Johnny managed to look for a tenant (Sandra) to step in as a new tenant in December that year. Sandra was told by Johnny that he is the property owner and thus, Sandra has paid the Rental for the six months tenancy (December 2016 to May 2017) to Johnny.
In January of 2017 shortly after Johnny defaulted on rental payment, Hassan carried out an inspection on the Property only to find out that Sandra was the new tenant. Hassan explained that he is the true owner of the Property and demanded for rental payment from Sandra if she wishes to continue staying on the Property. Having paid for all the rental payment to Johnny, Sandra of course, was reluctant to pay Hassan. Johnny was nowhere to be found.
Solutions
Starting with some precautionary measures, before entering into a tenancy, Sandra should ensure that Johnny is the rightful owner of the Property. Screening of a potential tenant is important but in most cases, tenants fail to carry out screening on their potential landlords which is equally crucial.
Sandra should have done some proper due diligence in respect of the ownership of the Property, before entering into any agreement or paying any deposit or rental, for example:
I. Request for the ownership documents from the landlord to ensure that he is the rightful owner; or
II. Carry out a land search at the land office with the Property details to determine the property owner; or
III. Check with neighbours about the landlord and the Property if the neighbours have lived in the area for a long time; or
IV. Do a quick google search on the landlord in the Internet to see if she could obtain any information (you would be surprised on what you can find on the Internet!).
If the landlord is not cooperative or unwilling to share any information, it should raise doubts and suspicions to the tenant.
In a situation like this, Hassan and Sandra should lodge a police report against Johnny. Technically, Sandra does not have a tenancy agreement in place with Hassan and as a landlord, Hassan has the right to evict Sandra from the Property.
To visit some of the other nightmares, look for the one you resonate with most:
- Property Nightmare Stories #1: Amanda and her MIA Tenant
- Property Nightmare Stories #2: A Swindler’s Set-Up
- Property Nightmare Stories #3: My Electricity Wasn’t Working So I Stole My Neighbour’s
- Property Nightmare Stories #4: You have 24 hours to get out of my house. April fool… ?
- Property Nightmare Stories #5: Private arrangement between tenants – Less hassle at the moment but more issues in the future?
- Property Nightmare Stories #6: My landlord wanted me to continue paying full rental even though the roof was leaking onto the living room
- Property Nightmare Stories #8: Why is your contract different from mine? Why do I have to pay you RM24,000 to move out?
This article was contributed by Alvin Teo (Advocate & Solicitor- Messrs Mak, Ng, Shao & Kee) and Nicole Ng (Advocate & Solicitor- Messrs Elizabeth Siew & Co). For more information or legal assistance, contact or email them at 07-3341922 (alvinteo@mnsklaw.com) or 03-8075 0901 (nicole.ng@esc.legal).
