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Wednesday, December 21, 2011

Selling with Tenancy?

Here I would like to relate an unfortunate experience of a close friend who bought a property with existing tenancy.  The tenancy was supposed to be valid until Dec 2012.  By the time my friend completed the whole process, he got the keys in late November 2012, with about 1 more year to go.

Recently he received a written notice from the tenant, stating that he wish to move out in Jan 2012, and therefore is giving 2 months' notice.  My friend immediately consulted me, and I said surely in the tenancy agreement, there must be a penalty clause for early termination.  In fact, there was none, the clause just says the tenant has to give 2 month's written notice, no penalty, no forfeiture of security deposit etc.

My friend was shocked, and upon a second look, we notice that the tenancy agreement was not even stamped at LHDN.  So he realized that he has been cheated.  What was supposed to be tenancy agreement was maybe a fraudulent piece of document that was created simply for the sale of the property.  The clause for termination was very loose and the agreement also not stamped.

So far I have advised my friend to seek the help of his lawyer to get the 2 months' security deposit that was not even handed over to him (he was told to get it from the tenant himself as the security deposit has been used by the owner to offset the previous 2 months' rental).

By now, my friend realized that the whole thing was a scam that was planned from the beginning.  The tenant and the owner were in cahoots, with a false tenancy agreement, and plans to quickly move out once the handover has taken place.

Lesson learnt: Check the tenancy agreement before buying, make sure the clauses are airtight.

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