Can a tenant avoid paying the rental fee due to the Malaysian government’s Movement Control Order (MCO)?

What should I do if I can’t pay rent during Covid19?

You can check your tenancy agreement to confirm whether there has Force Majeure Clause. Force majeure is not an automatic right or a principle which underpins any agreement impliedly. Instead, it must be expressed explicitly in a contract to enable a party to rely on it.

  • If there is force majeure clause in the agreement, you can try to apply this Clause. There have different effects of force majeure events depending on the tenancy agreement either suspension or waiver or termination.
  • If there is no force majeure clause in the agreement, you have no right to suspend or delay rental payment, or even terminate the tenancy despite any event that happens. However, you may have a discussion with your landlord.
What is Force Majeure?

What is Force Majeure?

Any events beyond the reasonable anticipation of those who signed a contract and which affects the agreement can be considered as force majeure events. This clause may help you to avoid obligation during an unanticipated and significant event occurring, beyond parties’ control.

What happens if I choose to apply Force Majeure?

This would depend on what the clause actually stated in the Tenancy Agreement. Normally, parties can choose to either terminate the contract, with no further claim against one another (i.e. the principle of frustration) or temporarily suspend or waive performance of certain obligations by certain parties.

Who can apply for Force Majeure?

Force Majeure can be used only by the party who cannot perform its obligation and that it would be the tenant in the case of MCO.

As a tenant, you may apply such clause to avoid paying the rental fees during the specified period if you have Force Majeure clause in SPA.

If there is no force majeure clauses in your tenancy agreement, the tenant may try to negotiate with the landlord for reducing or deferring the payment due to an unexpected situation. 

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