A Guide for Landlords and Tenants in Malaysia

When it comes to renting, the security deposit is usually the first “pain point” for both parties.
Landlords want protection. Tenants want fairness.
But where’s the line between reasonable and too much?

Let’s break it down.

What’s the Standard Practice in Malaysia?

The typical rental deposit in Malaysia looks like this:

• 2 months’ rental as security deposit
• 0.5 or 1 month as utility deposit
• First month’s rent in advance

Example: If your rent is RM2,000/month, the total upfront could be:

• RM4,000 (2 months security)
• RM1,000 (0.5 month utility)
• RM2,000 (first month rent)
  Total = RM7,000

This is considered standard and has been the norm for years.

When Does It Become “Too Much”?

If a landlord starts asking for:

• 3 months or more as security deposit
• Multiple months of rent in advance… that’s a red flag for tenants.

Unless the tenant has a poor credit history, no income proof, or is short-term renting, there’s usually no strong reason for a landlord to demand more than the standard.

Tenants: Don’t be afraid to ask, “Why so much?”
Landlords: If you ask for more, be ready to justify it clearly (e.g. furnished unit, luxury items, past bad experiences).

What Does the Law Say?

Malaysia’s laws around tenancy deposits aren’t strictly regulated — there’s no official cap — but they do fall under contractual agreements.
That means: Whatever both parties agree to in writing… stands.

Still, overcharging tenants could lead to disputes or difficulty renting out your unit. Fairness builds trust.

Landlords: How Much Is Enough?

Ask yourself:

• Is the property furnished or unfurnished?
• How long is the tenancy?
• Is this tenant high-risk?
• Have you done proper vetting (employment letter, payslip, references)?

Pro tip: Two months is usually enough to cover minor damages or missed rent. More than that? You risk scaring away good tenants.

Tenants: What Should You Look Out For?

• Always ask for a receipt for every payment.
• Check the agreement to ensure your deposit terms are stated clearly.
• Clarify when and how the deposit will be refunded (usually within 30 days after handing back the unit).
• Document the condition of the unit during handover (take photos/videos).

Final Thoughts

A deposit is protection, not punishment.
The goal is to build trust, not tension.

🔑 For landlords: Be fair, be clear, and you’ll attract better tenants.
🔑 For tenants: Know your rights and don’t be afraid to ask questions.

When in doubt — put everything in writing, and keep it professional.