What Can You Do If Your Landlord Doesn’t Return Your Rental Deposit?

Although we might hear countless stories about nightmare tenants, their counterpart, the nightmare landlords are out there as well. In fact, there have been stories of landlords using their tenant’s underwear for some unsavoury activities.

Your landlord might not be that bad, but there are some things that they can do that infringes on your rights as a tenant. One of those things is by withholding your rental deposit, which they have agreed to return at the end of your tenancy.

What is a rental deposit?

As the name suggests, a rental deposit is an advance payment that a tenant must make to a landlord before moving into a rental house. 

This deposit is used as a tenant’s guarantee towards the landlord and is usually returned at the end of the tenancy. The amount to be paid will be determined by the landlord based on the type of rental deposit, such as a security deposit or utility deposit.

In Malaysia, the most common type of rental deposit is the 2+1 rental deposit which is two months of rent, plus one extra month.

The purpose of a rental deposit is to protect the landlord from any damages that might occur due to the tenant’s negligence. The cost of repairing anything you break during the tenancy will come out of your two month deposit.

Meanwhile, the extra month in your rental deposit is usually regarded as the utility deposit, which covers the cost of any unpaid bills when you leave. 

If you’re a good tenant, you should get your deposit back as there won’t be anything to spend it on. Otherwise, you can expect some (or all) amount to be deducted before anything is returned.

When do you forfeit your rental deposit?

But first before you start confronting your landlord on your unreturned rental deposit, let’s explore what are the situations where a tenant will forfeit their rental deposit.

Usually, the landlord will be entitled to forfeit your deposit when there are major damages to the house that do not include the normal wear and tear. For example, if you leave the house with a huge hole on the ceiling, then the landlord will be entitled to use your rental deposit to repair the damages caused by you.

The importance of a tenancy agreement

In the event that your landlord has failed to return your deposit, you will have to prepare to take legal action. The first step is simple: find a copy of your tenancy agreement.

The reason for this is, your tenancy agreement is an agreement between you and your landlord, detailing all the terms and conditions of your tenancy. 

Some of the details that will be covered in your rental deposit includes terms such as;

• The length of your tenancy
• The amount of your monthly rent
• The pay window of your monthly rent, and
• The amount of your rental deposit.

The details of your rental deposit should also be detailed here, such as how much should be returned to you once the tenancy expires.

Unfortunately, if you can’t find your copy of your tenancy agreement, or you didn’t draw up one before your tenancy, there’s not much you can do.

What does the law say?

So now that you’ve found your tenancy agreement, what should you do next? Well, to help you figure out what your next step should be, let’s find out what the law actually says in regard to your rental deposit.

Until the Residential Tenancy Act is tabled in Parliament and approved to implement as law, any disputes will follow the existing private agreement (if any) that is signed between the renter and owner.

For example, if the tenancy agreement you sign states the deposit repayment period is within 14 days, then the landlord should repay it within the time stated in the agreement.

The proposed Act actually states that the rental deposit must be placed in a government agency, which will be a neutral party to manage the funds properly. But whether an independent government agency can actually return the deposit faster and without a ton of red tape and paperwork remains to be seen.

So, what are your options for now?

Pursuing legal action

When your landlord refuses to refund your rental deposit within the agreed upon period and you know that you haven’t committed any major infractions towards your landlord or your tenancy agreement, the first option you may choose to pursue is legal action.

In simpler terms, this means suing your landlord. However, it is common knowledge that suing your landlord is easier said than done, as suing someone is not cheap.

Other than the obvious lawyer fees, you will also need to fork out a considerable amount of money for other administrative costs such as filing fees, court fees, among others.

So unless your unpaid rental deposit outweighs all those costs, you might want to reconsider suing your landlord.

But that doesn’t mean that your hands are tied though, cause there is one more option that you can consider.

Going the small claims procedure route

The other option you can consider when trying to get your rental deposit back, is filing a small claims procedure.

However, there’s a catch to this option; your unpaid rental deposit has to be an amount lower than RM5000. If the amount of your rental deposit is lower than RM5000, then here’s the steps that you can take to file a small claim procedure;

• Obtain Form 198 from the registrar of the Magistrate Court.
• State the amount and particulars to the claim. Here’s where you attach your evidence (if any).
• Sign and thumbprint your form, and file four copies with the registry of Magistrate Court along with RM10.00 as filing fees.
• Extract the sealed copies of Form 198 and serve it upon the Defendant via personal service or by prepaid registered post to the defendant’s last known address. Make sure you serve your landlord via the AR registered post and keep a copy of the acknowledgement to prove to the court that you have served your landlord with the notice.
• The defendant who receives Form 198 will then have to file their defence and counterclaim (if any) under Form 199 within 14 days upon receiving the claim to dispute the claim.
• And finally, show up at court on the fixed date to present your case. Here, the court will pass the judgement as well.

And that’s it. Those are the steps that you want to take if you are looking to take your landlord to the small claims court over the unrefunded rental deposit.

In the end, you should take whatever option that fits your needs the most, and most importantly, document everything you have during your tenancy and any communication with the landlord after tenancy has ended, so you can use it as evidence in court.