Most people buy a house to start an investment, a new start and have a property to call their own. But, the journey of investing in a house can be a bumpy road if you don’t have the proper knowledge about it. Here at PROFERE we want to provide you with some effective tips upon managing your investment.
1. ALWAYS KNOW YOUR LAW
There is no Tenancy Act in Malaysia, nor can the legal framework on tenancies be described as ‘pro-landlord’. A landlord has to accept the hard fact that Malaysia is pro-tenant in practice.
In the event of a dispute between tenant and owner, the landlord is usually at a disadvantage, such as when the tenant defaults on rental, refuses to vacate the property, or overstays. In such circumstances, these are the landlord’s only legal remedies: Distress action under the Distress Act 1951 .
Upon the landlord’s application, a court of law can issue a warrant of distress for the recovery of rents due and payable to the landlord by a tenant of any premises for a period not exceeding 12 completed months of the tenancy preceding the date of the application. Eviction Order under the Specific Relief Act 1950
A landlord must obtain a court order before he or she can recover possession of the property from the tenant.
2. ALTERNATIVE DISPUTE MEASURES FOR TENNANCY GONE SOUTH
When there is a tenancy dispute, the first thought that may come to the landlord’s mind could be to change the padlocks, disconnect the supply of water and electricity, and forcibly enter the premises.
But hold your horses, because these actions may result in unfavourable results. The better self-help measures to take in urgent cases are as follows:
a. Lodge a police report;
b. Break the lock in the presence of a police officer;
c. Take as many photos of the interior to protect yourself in case the tenant claims loss of property;
d. Place a notice on the front of the property informing the tenant that you have made a police report; and,
e. Place a photocopy of the police report together with the notice.
This of course is the final resort. So, always pre-empt trouble by reading the tenancy agreement and make sure the terms are agreeable to you.
3. KNOW YOUR TAX RIGHTS
Once a property has hit a substantial amount of capital growth one investor would think of selling it . Property sellers can save a few hundred Ringgit by opting to file the necessary forms (most importantly, the CKHT 1A Form) with the Inland Revenue Board (IRB) on their own, without solicitor assistance.
Check out the IRB website at http://hasil.gov.my where a comprehensive guide is provided on how to do so. At the moment, the guidelines are only available in Bahasa Malaysia. Alternatively, visit your local bookstore to get a copy of my book, ‘Every Property Investors Guide To How To Pay Less Tax Legally’ for the guide in English, plus other tax-savings tips!
4) KNOW YOUR ALLOWABLE DEDUCTIONS UPON SALE
There are several expenses incurred which one can claim as an allowable deduction against the gain obtained from a property sale:
(a) Enhancement costs’, ie. expenditure incurred for the enhancement of the property, which includes renovation costs and the cost of construction of a building on the land.
(b) Fees, commission or remuneration paid for the professional services of any surveyor, valuer, accountant, agent or legal adviser.
(c) Transfer costs (including stamp duty).
(d) Advertising costs.
(e) Valuation report to ascertain market value.