Tenant Screening Malaysia: The Landlord's Complete Guide

In the United States, a landlord can pull a tenant's credit score, criminal record, eviction history, and employment verification in under ten minutes through a single online service. In Australia, landlords access the National Tenancy Database to check if a prospective tenant has ever been blacklisted. In Malaysia, you get none of that. There is no credit check service available to individual landlords. There is no rental history database. There is no centralized eviction registry. You are flying blind — and the consequences of picking the wrong tenant are severe because Malaysia has no dedicated residential tenancy law — the landlord-tenant relationship is governed by the tenancy agreement as a contract under the Contracts Act 1950, with eviction remedies under the Specific Relief Act 1950 and rent recovery under the Distress Act 1951. Removing a bad tenant requires civil court proceedings that take 6-12 months.

This means tenant screening in Malaysia is not a nice-to-have process. It is the single most important risk management activity a landlord performs. Get it right, and you have 2-3 years of steady rental income. Get it wrong, and you are facing months of unpaid rent, property damage, and legal fees that exceed the total deposit collected.

What Screening Tools Actually Exist in Malaysia

Let's be honest about what you can and cannot do:

The CTOS workaround: While landlords cannot pull a CTOS or CCRIS report on a prospective tenant, the tenant themselves can obtain their own CTOS report from ctoscredit.com.my for RM24.85. You can request that the tenant provide a recent CTOS report as part of the application. A legitimate tenant will not refuse this. An applicant who balks at sharing their credit report is telling you something.

What the CTOS report shows:

• Credit score (300-850 range)
• Outstanding loans and credit facilities
• Payment history (late payments, defaults)
• Legal actions (bankruptcy, court judgments)
• Directorship and business interests

A score above 697 is considered "good" by CTOS standards. Below 529 is "poor." For rental screening purposes, you want to see no defaults, no legal actions, and no bankruptcy proceedings.

The Screening Process: Step by Step

Step 1: Initial Inquiry Filter

Before scheduling a viewing, ask these questions via WhatsApp or phone:

1. What do you do for work? (Establishes income source)
2. How many people will be staying? (Occupancy check)
3. When do you need to move in? (Urgency can be a red flag)
4. How long do you plan to stay? (Tenure expectation)
5. Do you have pets? (If your unit does not allow them)
6. Have you rented before? Can you provide a reference? (Rental history)

This takes 5 minutes and eliminates unsuitable applicants before you waste time on viewings.

Step 2: Viewing and In-Person Meeting

Always meet the prospective tenant in person at the property. Never rent to someone you have not met face-to-face. During the viewing:

• Observe punctuality (late arrival without notice is a behavioral signal)
• Note how they interact with the property (do they check things carefully or rush through?)
• Ask follow-up questions about their work, family situation, and rental history
• Trust your instincts — if something feels off, it usually is

Step 3: Document Collection

Request the following documents from serious applicants:

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Step 4: Verification Calls

Make two calls:

Call 1: HR Department

• Confirm the person works at the stated company
• Confirm their job title
• Ask if employment is permanent or contract
• Do NOT ask about salary directly — just confirm they are employed

Call 2: Previous Landlord

• Confirm the tenant rented from them
• Ask: "Would you rent to this person again?" (The most revealing question)
• Ask about payment punctuality
• Ask about property condition at move-out
• Ask about any disputes

Important: Get the landlord's contact from the tenant, but verify it independently. Some applicants provide a friend's number instead. Cross-check the phone number against the tenancy agreement if the tenant can provide a copy, or look up the landlord's name against the property title.

Red Flags vs Green Flags

The 6-month advance payment trap: This is one of the biggest red flags Malaysian landlords miss. A tenant offering to pay 6-12 months rent upfront in cash sounds ideal. In practice, it often signals:

• Income instability (they have a lump sum now but uncertain future income)
• Desire to avoid ongoing scrutiny
• Potential use of the unit for unauthorized purposes (sub-letting, commercial activity)
• In rare cases, money laundering through property rental

Legitimate tenants with stable income prefer to pay monthly. Insist on monthly payments and proper deposit structure.

Deposit Structure: How Much to Collect

The standard deposit structure in Malaysia is:

Some landlords collect 3+1 (3 months security + 1 month utility) for higher-risk tenants or premium properties. This is acceptable but may reduce your tenant pool.

Can you collect more? There is no law in Malaysia capping the deposit amount. Unlike countries such as Australia (where deposits are capped at 4 weeks' rent) or the UK (where deposits are capped at 5 weeks' rent), Malaysian landlords can technically collect any amount. However, the market standard of 2+0.5 or 2+1 is well-established, and demanding excessive deposits will drive away good tenants.

Deposit holding: There is no legal requirement to hold the deposit in a separate trust account or deposit protection scheme. The landlord holds the deposit directly. This is different from the UK (where deposits must be in a government-approved scheme) and puts the power — and responsibility — in the landlord's hands.

Key rule: Always collect the deposit by bank transfer. Never accept cash deposits. The bank transfer creates a paper trail that protects both parties in disputes.

The Tenancy Agreement: Your Safety Net

Your tenancy agreement is the single most important document in the landlord-tenant relationship. In the absence of a specific Residential Tenancy Act in Malaysia (unlike Singapore, Australia, or the UK), the tenancy agreement IS the law governing your arrangement, interpreted under the Contracts Act 1950.

Essential clauses for tenant screening and protection:

Get a lawyer. A proper tenancy agreement drafted by a property lawyer costs RM300-800. Templates from the internet miss critical clauses. The legal fee is trivial compared to the cost of a dispute with inadequate contractual protection.

Stamping: The tenancy agreement must be stamped with LHDN (Inland Revenue Board) under the Stamp Act 1949. From 1 January 2025, stamp duty for tenancy agreements is calculated on every RM250 of annual rent (the previous RM2,400 annual exemption has been removed):

A minimum stamp duty of RM10 applies. Payment must be made within 30 days of execution.

Under Section 52(1)(a) of the Stamp Act 1949, an unstamped tenancy agreement is not admissible as evidence in court. If you ever need to enforce the agreement against a defaulting tenant, an unstamped agreement is essentially worthless.

When Things Go Wrong: Tenant Default

This is the part every landlord hopes to skip. Malaysian law makes tenant removal extremely difficult compared to most developed countries.

The core problem: Malaysia has no specific eviction law. Under Section 7(2) of the Specific Relief Act 1950, you cannot change locks, remove tenant belongings, or cut utilities to force a tenant out. All of these are illegal and could result in the landlord facing legal action.

Legal remedies for defaulting tenants:

Option 1: Distress for Rent (Distress Act 1951)

This allows a landlord to seize a tenant's movable property (furniture, equipment, vehicles) to recover unpaid rent, per Section 5(3) of the Distress Act 1951. The process:

1. File application with the Magistrate's Court
2. Court issues a warrant of distress
3. Court bailiff seizes tenant's movable property
4. If rent is not paid within 5 days, property is sold at auction
5. Proceeds applied to unpaid rent

Limitations:

• Only recovers unpaid rent (not damage or other losses)
• Tenant's essential items are exempt from seizure
• Process takes 4-8 weeks
• Legal fees: RM2,000-5,000
• Tenant may have removed valuable items before seizure

Option 2: Civil Court Action

For recovering the property itself (i.e., getting the tenant out):

1. Issue a letter of demand (14 days notice)
2. File a civil suit in the Magistrate's Court (if claim under RM100,000) or Sessions Court
3. Attend case management
4. If tenant contests, proceed to trial
5. Obtain court order for vacant possession
6. If tenant still refuses to leave, apply for warrant of execution (court bailiff physically removes tenant)

Timeline: 6-12 months from filing to enforcement. Longer if the tenant contests and appeals.

Cost: RM5,000-15,000 in legal fees depending on complexity.

Option 3: Negotiated Exit

Often the most practical option:

• Offer to waive claims against the tenant if they leave by a specific date
• Offer partial deposit refund in exchange for immediate vacant possession
• Put the agreement in writing

It feels unfair to "pay" a bad tenant to leave. But compare the cost of a RM3,000 concession against 6-12 months of legal proceedings, zero rental income during that period, and RM10,000+ in legal fees. The math almost always favors negotiation.

The best defense against tenant default is not legal action — it is proper screening that prevents the wrong tenant from entering your property in the first place. Every hour spent on screening saves hundreds of hours in potential legal proceedings.

Screening Questions: The Complete List

Use these during viewings and follow-up conversations:

Employment & Income:

1. Where do you currently work, and what is your role?
2. How long have you been at your current job?
3. Is your position permanent or contract-based?
4. Can you provide your latest 3 months' payslips?
5. Do you have any other income sources?

Rental History: 6. Where are you currently living? 7. Why are you moving out? 8. How long were you at your previous rental? 9. Can I contact your previous landlord? (Get name and number) 10. Have you ever had a deposit dispute with a landlord?

Occupancy: 11. Who will be living in the unit? (Get all names) 12. Do you have children? Ages? 13. Do you have pets? 14. Will anyone be working from home full-time?

Financial: 15. Are you comfortable with the deposit structure of 2 months security + 0.5 months utility? 16. Would you be able to provide a CTOS self-check report? 17. Do you have any outstanding legal matters or bankruptcy proceedings?

Tenure: 18. How long do you plan to rent? 19. Is there any possibility you might need to leave early? 20. Would you prefer a 1-year or 2-year lease?

Not every question will feel natural in conversation. Adapt to the flow. But cover the essential topics: income stability, rental history, occupancy, and tenure expectations.

Special Considerations by Tenant Type

Corporate Tenants

• Company signs the lease, employee occupies the unit
• Lower risk: company guarantees rent payment
• Request SSM registration, company authorization letter, and HR contact
• Usually accept standard deposit terms without negotiation
• Downside: employee may transfer, leading to early termination

Foreign Tenants / Expats

• Request passport copy and valid work permit/visa
• Verify visa expiry date — should extend beyond lease period
• Request employer letter confirming posting duration
• Higher rent tolerance (often on housing allowance)
• May require bilingual tenancy agreement

Students

• Higher risk category: limited income, first-time renters
• Request parent/guardian as guarantor on the lease
• Guarantor should sign the tenancy agreement and be jointly liable
• Confirm enrollment at nearby institution
• Consider shorter lease (1 year) with renewal option

Self-Employed / Business Owners

• Income verification is harder — no payslips
• Request SSM registration, tax returns (Form B), and bank statements
• 6 months of bank statements instead of 3 months
• Consider higher deposit (3+1) for additional security

Building Your Screening System

The best landlords treat screening as a system, not a one-time activity:

1. Create a standard application form — Same questions for every applicant
2. Set minimum criteria — Income 3x rent, positive landlord reference, no defaults on CTOS
3. Document everything — Keep copies of all documents for the tenancy file
4. Check-in inspection — Photograph every room on move-in day, both parties sign condition report
5. First 3 months monitoring — Confirm rent is paid on time, conduct a courtesy visit at month 3

This system takes 3-4 hours per tenancy. The alternative — dealing with a bad tenant — takes 200+ hours over 6-12 months.

Sources

• Contracts Act 1950 — governs tenancy agreements as contracts
• Specific Relief Act 1950 (Section 7) — eviction must be through court order
• Distress Act 1951 — landlord remedy for unpaid rent
• LHDN — Stamp Duty on Tenancy Agreements (Stamp Act 1949)
• CTOS — Credit Reporting

Related reading:

• Tenancy Agreement Malaysia: The Landlord's Guide
• Rental Income Tax Malaysia: How to Declare & Deductions