Introduction
Property agents play an important role in facilitating property transactions in Malaysia, including the letting of residential and commercial properties. Their functions may include introducing landlords and prospective tenants, arranging viewings, negotiating commercial terms and coordinating the transaction.
Tenancy agreement is a very important legal instrument that protects rights, sets limits, and also create resolution for any dispute and conflict.
The million-dollar question here is whether a property agent in Malaysia can prepare Tenancy Agreement and if there is any statute or law which permit so.
Who is a property agent?
Property agents are those required to be registered and issued “authority to practice” by the Board of Valuers, Appraisers, Estate Agents and Property Managers as per section 16 of the Valuers, Appraisers and Estate Agents Act 1981 (Act 242).
Tenancy Agreement
A tenancy agreement is a legal agreement that is having legal binding force between the landlord and tenant which outlines important clauses like rental terms, tenancy period, rights of the tenant and landlord, responsibilities and liabilities of both parties, renewal period, early termination and notice period, exit clause etc.
Since Malaysia’s proposed Residential Tenancy Act under the National Housing Policy 2026-2035 is still ongoing, but it will be a game changer for the tenancy and property market as the legislative intent is to promise a more transparent, safe and balanced rental market by clearly defining the rights and responsibilities of tenants and property owners.
Thus, the main Acts of Parliament governing the tenancy matters in Malaysia that we can turn to are among others, Contracts Act, Distress Act, Specific Relief Act, National Land Code, Stamp Act etc.
Legal Point of View for Tenancy Agreement
Under Section 37(2)(a) of the Legal Profession Act 1976 (LPA), it must be noted that the drafting legal instruments relating to immovable property (including tenancy agreements) for fee, gain, or reward is restricted exclusively to qualified advocates and solicitors.
Every person who is convicted of an offence under subsection (2) or (3) shall, on conviction, be liable for the first to a fine not exceeding five hundred ringgit or in default of payment to imprisonment for a term not exceeding three months and for the second or subsequent offence to a fine not exceeding two thousand ringgit or to imprisonment for a term not exceeding six months or to both.
Furthermore, the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP / LPPEH) issued Notification 3/2024, which explicitly reminds registered estate agents and negotiators (RENs) that drafting tenancy agreements constitutes the unauthorized practice of law and subject agents to disciplinary action.
Risks that likely to arise if an agent drafts legal agreement
- Compliance Risk
Ignoring the guideline and directive of Notification 3/2024 will trigger disciplinary actions from BOVAEP.
- Legal risk
Any agent who drafts the Tenancy Agreement for a fee in Malaysia is deemed to have breached the law and the punishment will be imposed on the culprits.
- Liability risk
Any legal document that is drafted by a person from non-legal background can open to omission of important legal clauses which serve to protect the best interest of client. When the terms drafted by a non-legal person is not beneficial or hazardous to the client, it might pose liability risk and cause problems to arise in the future if the client is not equipped with full understanding of what he/she is signing.
How can Property Agents and Lawyers Work Together?
A practical division of responsibilities is preferable to ensure professional relationship can be well maintained and the needs of the customer can be met.
Step 1: The agent facilitates the transaction
The agent may negotiate and record the commercial terms agreed between the parties, subject to the agent’s duties and regulatory obligations.
Step 2: The agent provides factual particulars
The agent may collect the necessary factual information, personal details and particulars then provide it to the appointed solicitor.
This may include the parties’ particulars, property details, agreed rental, deposits, tenancy period and other commercial terms.
Step 3: The lawyer advises and drafts
The appointed solicitor can then advise the relevant client on the legal implications of the transaction and prepare the tenancy agreement accordingly.
Step 4: The parties review and execute the agreement
The landlord and tenant should review the agreement and obtain appropriate legal advice before signing it.
The lawyer should be responsible for explaining legal provisions to the client where legal advice is required. The property agent may continue to explain factual or commercial matters within the agent’s proper role.
Step 5: Stamping
After execution, the parties should ensure that the tenancy agreement is properly stamped and that the applicable stamp duty requirements are complied with.
Touting in the legal market
Another issue to be taken note is about touting in the legal industry. It is a banned practice for lawyer and agents to work together to tout or overly promoting their service together for gaining business as it can amount to touting.
Bar Council had in the Circular 335/2025 mentioned that touting activity can be reported and taken action against under section 15A of the Minor Offences Act which is “Offering, soliciting to offer, or loitering for the purpose of offering, services for profit or reward”.
In short, it is best to engage lawyers to best protect your rights as tenant or homebuyers, and go through the clauses guided by a legal trained professional, which is a lawyer so that the clauses of your tenancy agreement are of beneficial and can best serve your interest!