Ending a Tenancy Early in Malaysia: Rights, Deposits and Notice for Tenants and Landlords

中文 · Bahasa Melayu · Bahasa Indonesia

By Jason Lim, REN 84424 · IQI Realty · Checked on 10 November 2026

This guide is for tenants and landlords in Johor Bahru and elsewhere in Malaysia, including people from Singapore, Indonesia, India and China. The short answer: Malaysia still has no residential tenancy act, so your tenancy agreement decides whether and how either side can end a fixed-term tenancy early. Without an early-exit clause, a tenant who leaves early is in breach and may lose the deposit or owe rent, but the landlord can only recover reasonable compensation and must try to re-let. A landlord cannot end a tenancy early just because they want the unit back, unless the agreement allows it or the tenant has breached it.

The legal position in November 2026

In February 2026 the housing minister said the Residential Tenancy Bill (Rang Undang-Undang Sewaan Kediaman) would be tabled that year (Utusan Malaysia). On 4 August 2026 his deputy told the Dewan Negara it was still being finalised (Bernama), and on 12 August an NGO urged that it not slip to 2027 (Free Malaysia Today). I found no report of tabling by 10 November 2026, so treat any tenancy act as a proposal.

Until then, ending a tenancy early is a contract question:

• Contracts Act 1950, section 74. The party hurt by a breach can claim loss that naturally arises from it. Its Explanation says the means that existed of remedying the inconvenience must be taken into account, which is the basis of the duty to mitigate.
• Contracts Act 1950, section 75. Where the contract names a sum payable on breach, such as a forfeited deposit, the innocent party gets reasonable compensation not exceeding that sum, whether or not actual loss is proved.
• Contracts Act 1950, sections 40 and 76. If one side refuses to perform its promise entirely, the other may end the contract and claim compensation.
• Specific Relief Act 1950, section 7. An owner cannot recover possession from an occupier who stays on except through court proceedings.

This is general information, not legal advice. For a disputed termination, speak to a Malaysian lawyer.

Early-termination clauses you will see in JB agreements

Most Johor Bahru agreements follow one of these patterns:

Clause type	What it usually says	Who it helps
No early termination	Neither side may end before expiry; if the tenant leaves early, the landlord may keep the security deposit	Landlord, though forfeiture is still tested for reasonableness
Diplomatic (expatriate) clause	After a minimum period, often 12 months, the tenant may end with written notice, often two months, if transferred out of the state or country or unable to renew a work permit, usually with proof	Foreign tenants and company lets
Mutual break clause	Either side may end after a set period with written notice, sometimes paying an agreed sum	Both sides, if the terms are balanced
Landlord’s early termination	The landlord may end early, for example to sell or move in, by refunding the deposit and paying agreed compensation; one published sample uses two months’ rent	Owners who may sell
Replacement tenant	The tenant may leave if they introduce a suitable replacement the landlord accepts, paying the landlord’s costs of the new letting	Both sides; it limits lost rent

Check how notice must be served, when the notice period starts and whether rent runs during it. If the agreement is silent, neither side has a general right to walk away during a fixed term.

Tenants: how to end a tenancy early

1. Find the clause. Note the minimum period, notice length, how notice is served and what you owe.
2. Talk to the landlord early. A landlord with time to re-let is more likely to agree a fair exit.
3. Give written notice in the form the agreement requires, keeping proof of delivery.
4. Offer a solution. A replacement tenant, viewing access, or rent until a new tenant moves in.
5. Put the deal in writing. A short termination (surrender) letter signed by both sides should state the end date, rent payable, how the deposit is treated and that neither side has further claims.
6. Keep paying rent until the agreed end date, and hand over properly.

Can the landlord keep the whole deposit?

Only if the agreement says so, and even then within limits. A forfeiture clause names a sum payable on breach, so section 75 applies. In Cubic Electronics v Mars Telecommunications, the Federal Court held that actual loss need not be proved, but that a deposit is not automatically forfeitable, and that the party in breach carries the burden of showing the sum is unreasonable (University of Malaya Law Review commentary). If the unit was re-let within days at the same rent, a tenant may argue that keeping two months’ rent is excessive. A court decides.

Do I owe rent for the rest of the term?

Not automatically. If there is no forfeiture clause, or the landlord claims more than the deposit, the claim is for actual loss under section 74. Because the means of remedying the loss must be taken into account, a landlord is expected to take reasonable steps to re-let, and the loss is broadly the rent lost while the unit is empty, any shortfall if it re-lets for less, and reasonable re-letting costs. Do not stop paying and tell the landlord to “use the deposit”; most agreements forbid using it as rent (see my rental deposit refund guide).

When the landlord is the one in breach

If the landlord fails a basic obligation, for example a serious leak is never repaired, or the tenant is locked out, the tenant may have the right to end the tenancy and claim compensation under sections 40 and 76. Complain in writing with a deadline and keep photos. Leaks from the unit above are often a building matter (see my guide to a condo water leak from the unit above). Get legal advice before you leave on this basis, because if the breach is not serious enough, you become the party in breach.

Landlords: when you can end a tenancy early

A fixed-term tenancy binds the landlord too. You can usually end it early only in these situations:

• The agreement allows it. A landlord’s break clause, for example on sale or for own use, with the notice and compensation it sets out.
• The tenant has breached it. Unpaid rent, illegal use, subletting without consent or serious damage, usually after a written notice to remedy as the agreement requires. My guide to a tenant not paying rent covers notices and court routes.
• Both sides agree. Offering the tenant the full deposit back or help with moving costs in return for an earlier exit is often quicker and cheaper than a dispute.

Selling does not end a tenancy by itself. You can sell with the tenant in place to an investor, or agree vacant possession with the tenant; my guide to selling a tenanted property compares both, and buyers can read about buying a tenanted property in JB.

What you must not do is take the unit back yourself. Changing locks, removing belongings or cutting electricity or water can expose you to a claim; under section 7 of the Specific Relief Act 1950, an occupier who stays on can only be removed through the courts. The Malaysian Bar’s conveyancing column notes that a landlord who breaks a lock may face a civil suit. If a tenant appears to have abandoned the unit, record the evidence and ask a lawyer before re-entering or re-letting.

A worked illustration

A tenant on a two-year agreement at RM2,000 a month, with a RM4,000 security deposit and no diplomatic clause, leaves after 10 months:

Scenario	What the landlord might claim	Points to note
Agreement forfeits the security deposit on early exit	RM4,000 kept; utility deposit refunded less final bills	Up to the named sum only, and only reasonable compensation under section 75
Landlord re-lets after 2 months at RM1,900	Lost rent RM4,000 + shortfall RM100 × 12 months = RM1,200 + re-letting costs, say RM1,000 = RM6,200	Deposit of RM4,000 set off; RM2,200 balance claimed, which the tenant can challenge
Tenant introduces a replacement who moves in 1 month later at RM2,000	One month’s rent, RM2,000, plus agreed costs	Usually the lowest cost for both sides, if agreed in writing
Landlord leaves the unit empty for the full 14 months	RM28,000	Unlikely to be recoverable in full, because the landlord did not try to re-let

Amounts up to RM5,000 can go to the small claims procedure in the Magistrates’ Court (Order 93, Rules of Court 2012), where individuals generally represent themselves (Malay Mail, February 2025). Larger claims usually need a lawyer.

Notice, handover and the deposit

An early exit still ends with a normal handover. The usual deposits are two months’ security deposit and about half a month’s utility deposit (Malay Mail, July 2026), but that is practice, not law. Agree the date, inspect the unit together against the move-in inventory, photograph every room and the meters, and list returned keys and access cards. Settle in writing which part of the security deposit is kept under the clause or the termination letter, and which part is refunded and by when. The utility deposit is separate: it covers final bills and should normally come back once they are paid. My rental deposit refund guide covers deductions and timing in detail.

Stamp duty already paid

Stamp duty on a tenancy agreement is charged under Item 49 of the Stamp Act 1949’s First Schedule. Under LHDN’s guideline of 30 June 2026, it is RM1 per RM250 of annual rent for a term of up to one year and RM3 for more than one year up to three years, so RM2,000 a month on a two-year term costs RM288.

• No refund in the usual case. LHDN’s November 2025 guideline lists refund routes under sections 50B, 57 and 58 of the Stamp Act, with applications within 24 months. Section 57 covers cases such as an instrument void from the beginning, never completed, or replaced by another instrument. A valid tenancy that ran for months and then ended early does not obviously fit, so the duty is generally not refunded. Ask LHDN if your case is unusual.
• New tenant, new stamping. A replacement tenant signs a new agreement, which must be stamped within 30 days of signing through LHDN’s e-Duti Setem on MyTax.

Switching to short stays after a tenant leaves

Some owners consider short-stay letting once a long-term tenant leaves. Check first: in October 2026 the housing ministry said national short-term rental guidelines were being finalised (The Star), and many condo by-laws restrict short stays. My guide to Airbnb and short-stay rules in Johor Bahru covers the rules. A tenant also cannot convert the unit to short stays or sublet it without the landlord’s consent; doing so is usually a breach that lets the landlord end the tenancy.

Foreign tenants and owners abroad

• Ask for a diplomatic clause at the start. If your employer could transfer you, or your pass may not be renewed, negotiate it before signing. See my guide to renting in Johor Bahru as a foreigner.
• Leaving Malaysia mid-term. Give notice before you go and agree the handover and refund account in writing.
• Owners in Singapore, Indonesia, India or China. Have someone local for the inspection, re-letting and any notices. My guide to managing a JB property from overseas covers the options, and a power of attorney can help with bigger steps.
• Tax. Rent and any compensation for lost rent may be taxable; see my rental income tax guide and check with LHDN or a tax adviser.

If you are a tenant thinking of buying instead, note that foreigners can generally buy residential property in Johor only from RM1 million, with some exceptions (New Straits Times, April 2026); see my page on the Johor foreigner minimum price.

Where to rent or buy if this matters to you

Early exits cost less where units re-let quickly, as in these areas:

• JB Sentral and Bukit Chagar: near the CIQ and the RTS Link station, popular with Singapore commuters.
• Mount Austin: families, schools and cafes, with condos and landed homes.
• Tebrau, Setia Indah and Molek: established neighbourhoods near malls.
• Iskandar Puteri: Medini, EduCity and the Second Link.
• Skudai, Tampoi and Kempas: around Universiti Teknologi Malaysia; see my student housing guide.
• Permas Jaya and Senibong: east-side condos at moderate rents.

Compare them on my JB property map, and if you are letting out a home, see my guide to renting out property in Johor.

More Johor living guides: Furnished or unfurnished rental · Landlord tenancy agreements in JB · Rental deposit refunds in Malaysia · Tenant not paying rent · Selling a tenanted property

Frequently asked questions

Can a tenant end a tenancy early in Malaysia?

Only if the tenancy agreement allows it, for example through a diplomatic or break clause, or if the landlord agrees. Otherwise leaving early is a breach, and the tenant may lose the deposit or owe the landlord’s actual loss, subject to the landlord’s duty to try to re-let.

What is a diplomatic clause in a tenancy agreement?

A clause letting an expatriate tenant end early if transferred out of the state or country or unable to renew a work permit. A common version applies after the first 12 months and needs two months’ written notice, often with proof.

Can my landlord keep my whole deposit if I leave early?

Only if the agreement provides for it, and even then section 75 of the Contracts Act 1950 limits the landlord to reasonable compensation up to that sum. Since the Federal Court’s Cubic Electronics decision, the tenant must show that keeping it is unreasonable.

Can a landlord end a tenancy early to sell the property?

Only if the agreement has a clause allowing it or the tenant agrees. A sale does not end a tenancy by itself, so many owners sell with the tenant in place or negotiate vacant possession, sometimes with compensation.

Is stamp duty refunded if a tenancy ends early?

Generally no. Refunds under the Stamp Act 1949 are limited to specific cases, such as an instrument void from the beginning or never completed, applied for within 24 months. A replacement tenancy must be stamped again within 30 days of signing.

Is there a Residential Tenancy Act in Malaysia in 2026?

Not yet. In August 2026 the housing ministry said the Residential Tenancy Bill was still being finalised, and I found no report of it being tabled by 10 November 2026. Early termination is governed by the tenancy agreement and the Contracts Act 1950.

Need to end a JB tenancy early?

Tell me whether you are the tenant or the owner, the project, the rent and your target date. I can market the unit to new tenants for landlords, and help tenants look for a replacement the landlord may accept. For a disputed deposit or claim, use a Malaysian lawyer. You can also book an appointment, or a Zoom consultation if you are abroad.

Sources: Bernama, “Residential Tenancy Bill being finalised to balance rights of tenants and landlords”, 4 August 2026; Utusan Malaysia, “RUU Sewaan Kediaman akan dibentang di Parlimen tahun ini”, 5 February 2026; Free Malaysia Today, “Don’t delay tabling Residential Tenancy Bill to 2027, NGO tells govt”, 12 August 2026; Contracts Act 1950 (Act 136), sections 40, 74, 75 and 76, Laws of Malaysia reprint incorporating amendments to 1 January 2006 (FAOLEX copy), checked November 2026; University of Malaya Law Review, commentary on the Federal Court’s decision in Cubic Electronics v Mars Telecommunications, accessed November 2026; Specific Relief Act 1950 (Act 137), section 7, Laws of Malaysia text, checked November 2026; New Straits Times, landlord’s guide to tenancy agreements, part 4: special conditions and sample clauses, accessed November 2026; Malaysian Bar Conveyancing Practice Committee column, “Tenancy agreement”, accessed November 2026; Malay Mail, on rental deposits for first-time renters, 12 July 2026; Malay Mail, on the small claims procedure (Order 93, Rules of Court 2012), 28 February 2025; LHDN, Garis Panduan Pengenaan Duti Setem, First Schedule, Stamp Act 1949 (Item 49), 30 June 2026; LHDN, Garis Panduan Pengenalan Duti Setem di bawah Akta Setem 1949 (relief and refunds), 6 November 2025; Stamp Act 1949 (Act 378), section 57, Laws of Malaysia text, checked November 2026; LHDN, stamp duty penalties and stamping deadlines, updated 13 May 2026; The Star, short-term rental guidelines being finalised, 26 October 2026; LHDN, Public Rulings (No. 12/2018, Income from Letting of Real Property), accessed November 2026; New Straits Times, “Foreigners hit Johor property resale wall”, 20 April 2026

Jason Lim, REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6. General information checked on 10 November 2026, not legal or tax advice. Laws, court rules and LHDN practice change, and the Residential Tenancy Bill may alter these rules once passed; confirm with LHDN, the court registry and a Malaysian lawyer before you act.