Landlord investments need better safeguarding against criminal tenants.
KUALA LUMPUR: Malaysia could safeguard landlords against investment-related losses by requiring that all rental transactions be conducted by licensed real estate agents. These agents would be responsible for document verification and would maintain blacklists of problematic tenants, according to IQI head of the Bumiputera segment Muhazrol Muhamad.
Likewise, Bukit Aman commercial crime investigation department director Ramli Mohamed Yoosuf suggested police may need to prosecute landlords for criminal conspiracy or abetment when their tenants break the law. These criminal activities can include operating fraudulent call centres, mining bitcoin and operating brothels or gambling dens.
“The main challenge is that too many parties can handle rentals. Today, homeowners can rent out their units directly through (property-related and social media) platforms without involving a licensed real estate agent. In fact, many rental transactions are managed by unregistered agents, middlemen or sublet companies, making enforcement extremely challenging. That is far from the ideal of requiring registered real estate agents or real estate negotiators (RENs) under their supervision to handle leases,” said Muhazrol.
“If the government wants to make rental property regulation more manageable, then only registered real estate agencies should be allowed to manage property rentals. This would ensure that regulation is focused on entities that are trained and have the resources. It would take individual landlords and tenants out of the line of fire. This would also ensure all rental transactions go through official contracts and proper know-your-customer-style due diligence is completed,” he continued.
“This would reduce the risk of properties being misused for criminal activities. It would also enable agents to protect landlords by blacklisting problematic tenants. Of course, this proposal also has its challenges because it may burden individual landlords who prefer to rent out their properties without an agent. Still, from a regulatory standpoint, it could be a more effective solution to ensure a safer and more structured rental market in Malaysia. Landlords would no longer be held liable for the crimes and misdeeds of their tenants,” concluded Muhazrol.
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