Property owners who rent out residential units are increasingly reminded of their responsibilities, particularly following recent enforcement action that exposed illegal activities operating out of a luxury condominium in Kuala Lumpur.
The case has prompted renewed discussion on landlord liability, tenant screening, and the limits of “quiet enjoyment” under Malaysia’s current legal framework. According to Chur Associates founder and managing partner Chris Tan, residential tenancy agreements are meant strictly for residential occupation, not commercial or unlawful use.
In general, landlords are not automatically liable for illegal activities carried out by tenants if they have no knowledge of such conduct. However, Tan cautioned that once a landlord becomes aware—or should reasonably be aware—of non-residential or unlawful use, failure to act may be interpreted as complicity.
Activities such as cryptocurrency mining, which often involve excessive electricity consumption, may already fall outside normal residential use. Likewise, knowingly allowing a unit to be used for scams, drug-related operations, or other criminal activities could expose owners to legal consequences if no action is taken after red flags emerge.
Tan noted that Malaysia currently does not have a standardised Residential Tenancy Act, meaning disputes between landlords and tenants are assessed individually. Most tenancy relationships are governed by common law principles inherited from the British legal system, particularly the tenant’s right to “quiet enjoyment”.
Once possession is granted and rent is paid, tenants enjoy strong legal protection against interference, even though they are not the property owners. This principle also explains why eviction, possession recovery, and squatter-related cases are often lengthy and complex.
That said, landlords are not entirely without responsibility. Reasonable due diligence is expected when selecting tenants, especially in high-value residential developments near commercial property in KL, business districts, or mixed-use hubs.
Tan explained that certain tenancy arrangements may warrant closer scrutiny, such as residential units rented under company names or agreements with unusually short or irregular tenancy terms.
Where utilities such as electricity and water remain under the landlord’s name, owners may legally observe usage patterns. Abnormally high or inconsistent consumption could justify further inquiry, particularly if it does not align with normal residential living.
Landlords are also permitted to access their properties for legitimate reasons such as maintenance, servicing, or inspections, provided such access is reasonable and justifiable. Any suspected criminal activity, however, should be reported to the relevant authorities rather than handled privately.
While the majority of tenants are legitimate, certain behavioural patterns may collectively indicate misuse of a residential unit.
One frequently observed sign is an offer to pay above-market rent with little or no negotiation, sometimes accompanied by unusually large deposits paid upfront. Rent that is consistently paid early or exactly on time, paired with minimal personal interaction, has also appeared in questionable cases.
Some tenants place extreme emphasis on privacy, actively discouraging inspections or refusing direct communication. Others interact only through intermediaries or “assistants”.
Frequent parcel deliveries, constant lighting at odd hours, or heavy late-night foot traffic may also raise concerns. Additional warning signs include refusal to allow repairs, sparse furnishings despite high utility usage, and an absence of personal belongings—suggesting the unit is not genuinely occupied as a home.
In certain cases, residential units have been converted into illegal call centres or scam operations. These setups may involve multiple mobile phones, routers, extension cords, and networking equipment, along with requests for several broadband lines.
Tenants may insist on sealed windows, permanently drawn curtains, or additional cabling and power points. Occupancy patterns may include rotating groups of young individuals, often with constant phone conversations, scripted speech, or headset use throughout the day and night.
Units used for drug-related activities may exhibit distinct environmental signs, such as strong chemical odours, blacked-out windows, continuous air-conditioning usage, or unauthorised ventilation modifications.
Requests to alter sinks, drains, or exhaust systems may also occur. Waste disposal may include bags containing unusual residue or materials resembling laboratory by-products. In some cases, tenants provide vague explanations such as “research” or “online business” activities without documentation.
Some residential units have reportedly been used as logistical centres for illicit financial operations. These may involve constant parcel movement, utilities registered under multiple names, or mailboxes accessed by third parties.
Other red flags include the unit’s address being used to register multiple businesses, resistance to inspection clauses, unauthorised subletting, and unexplained occupants. Sharp spikes in utility usage, evasive behaviour when questioned, or unauthorised wiring and locked rooms may also be present.
Experts caution that individuals involved in illegal activities often present themselves as “ideal” or low-maintenance tenants to avoid attention. No single indicator should be treated as proof of wrongdoing.
However, when multiple warning signs appear together, landlords may be justified in taking reasonable steps within the boundaries of tenancy agreements and the law.
As Kuala Lumpur and Selangor continue to see strong rental demand—not only for residential units but also for office space in Bukit Jalil, industrial land in Selangor, factory premises in Puchong, and industrial property in the Subang area—landlords and investors are increasingly reminded that asset protection goes beyond yield and occupancy. Proper tenant screening and responsible management remain critical to long-term property value and compliance.
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