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By Jason Lim, REN 84424 · IQI Realty · Checked on 10 November 2026
This guide is for owners, Malaysian or foreign, selling a Johor Bahru home with a tenant in it. The short answer: a sale does not end the tenancy by itself. You either sell subject to the tenancy, so the buyer becomes landlord at completion, or end the tenancy under the agreement’s own terms and sell with vacant possession. Either way, the deposits and the completion month’s rent are settled through the sale and purchase agreement (SPA).
Quick answer
- Two routes: sell subject to the tenancy (tertakluk kepada penyewaan), usually to an investor, or sell with vacant possession (milikan kosong), which suits owner-occupiers.
- The tenancy agreement decides whether you can end it early, how much notice you must give and whether you can bring buyers in for viewings. Malaysia still had no Residential Tenancy Act in force in November 2026.
- No self-help: a former tenant who stays on can only be removed through the courts (Specific Relief Act 1950, section 7).
- Deposits move with the deal: the security and utility deposits you hold are normally paid to the buyer, or credited against the price, at completion, and the month’s rent is split by days.
- Tax is unchanged: RPGT works the same with or without a tenant, and the buyer still retains 3% of the price (7% for a foreign seller) for LHDN.
Does selling end the tenancy?
No. Selling does not cancel the tenancy contract. What happens depends on the agreement and, in the background, the National Land Code (Kanun Tanah Negara):
- Up to three years. Most JB lettings are “tenancies exempt from registration” (sewaan bebas daftaran) under section 223, oral or written and not registered.
- Endorsement. A tenant can protect one by endorsement on the title under section 316.
- Longer than three years. That is a lease; once registered on the title it binds a buyer.
- Unendorsed tenancies. Whether one binds a new owner is a technical point for your lawyer.
In practice, the letter of offer and SPA say which route applies, and the tenancy agreement governs until then. The Residential Tenancy Bill was still being finalised when the deputy housing minister spoke in the Dewan Negara on 4 August 2026, and I found no report of it being tabled by early November 2026. This is general information, not legal advice.
If your title is charged to a bank
Section 226 of the National Land Code requires the chargee’s written consent to a tenancy of charged land, and many loan documents have a similar term. If you let the unit during the loan, mention it to your lawyer early. See buying when the seller has a loan for how redemption works.
Sell with the tenant or with vacant possession?
Decide before you set the asking price; it changes who buys and what you promise.
| Point | Sell subject to the tenancy | Sell with vacant possession |
|---|---|---|
| Who usually buys | Investors who want rent from completion | Owner-occupiers, MM2H participants, buyers planning a renovation, and investors who want to set their own rent |
| What you hand over | The tenancy, the deposits, the original agreement and spare keys | An empty unit and all keys |
| What you must do first | Nothing to the tenancy; keep it running as it is | End the tenancy at expiry or under an early-termination clause, or agree a surrender with the tenant |
| Main risk for you | Fewer buyers if the rent is low or many years remain | The tenant does not leave in time and you cannot give vacant possession on the SPA date |
| Rent while you sell | Continues to completion | Stops when the tenant leaves, so you carry the holding costs |
Selling subject to the tenancy
Rent keeps coming in and there is no empty period. Investors look at the rent actually paid, the remaining term, any renewal option and the payment record. A long term at a rent below what similar units now ask narrows the buyer pool more than a tenancy near expiry; how much varies by building, so I won’t put a number on it.
Selling with vacant possession
Read the termination clauses first. Some agreements let the landlord end the tenancy on a sale with set notice; many allow early termination only by agreement. Your options:
- Wait for expiry. Set completion after the tenancy ends, with a buffer for the move-out inspection.
- Use the agreement’s own clause. Give exactly the notice it requires and keep proof of delivery.
- Agree a surrender. Some tenants agree to leave early in return for help with moving costs. Sign a letter setting the move-out date, inspection and deposit refund; no law fixes any amount.
Never promise a vacant possession date you do not control. If a tenant stays on after the tenancy ends, section 7(2) of the Specific Relief Act 1950 means possession can only be recovered through the courts, not by changing locks, while the SPA clock keeps running. If the date is uncertain, sell subject to the tenancy or ask your lawyer for a clause that moves completion. The court routes are in my guide to a tenant who stops paying rent.
Telling the tenant and arranging viewings
Tell the tenant early, in writing, that you plan to sell and which route you are taking.
- Check the access clause. Many agreements let the landlord show the unit at reasonable times with prior notice. If yours is silent, agree a schedule.
- Group the viewings. A few fixed slots a week are easier on the tenant than daily calls.
- Respect privacy. Ask before photographing the tenant’s belongings, and share their personal details only with consent; masked copies are enough before an offer.
- Plan the valuer’s visit. Agree access for the buyer’s bank valuer early so the loan is not held up.
For the clauses a good agreement should have, see my landlord tenancy agreement guide.
Selling a tenanted unit in JB?
Send me the project, the current rent and when the tenancy ends. I’ll tell you whether I would market it to investors with the tenant or plan for vacant possession, and what buyers will ask to see.
WhatsApp JasonDocuments buyers will ask for
Have these ready before you list to avoid delays between the offer and the SPA.
| Document | Why the buyer wants it |
|---|---|
| Tenancy agreement (perjanjian sewa), all pages | Term, rent, renewal option, termination and sale clauses, repair split |
| Stamp certificate | Section 52 of the Stamp Act 1949 bars an unstamped agreement from being used in evidence until the duty and any penalty are paid |
| Rent records for 6 to 12 months | Shows the rent is paid in full and on time |
| Deposit receipts | Confirms the security and utility deposits you actually hold |
| Inventory list and photos | Furniture and appliances that stay with the unit |
| Latest maintenance, quit rent and assessment receipts | Shows no arrears; see my subsale arrears guide |
The letter of offer and the SPA
The letter of offer should say “subject to the existing tenancy” (naming the agreement by date) or “with vacant possession”. In a tenanted sale, expect the buyer’s lawyer to ask for:
| SPA term | What it means for you as seller |
|---|---|
| Warranties on the tenancy | You confirm the rent, deposits held, no arrears and no side agreements |
| No changes before completion | You do not renew, vary or end the tenancy, or collect rent in advance, without the buyer’s written consent |
| Deposits | You pay the security and utility deposits to the buyer, or they are credited against the balance price, at completion |
| Rent apportionment | Rent for the completion month is split by days; arrears before completion stay yours to collect |
| Notice to the tenant | You sign a letter telling the tenant that the buyer is the new landlord and where to pay rent from completion (often called a letter or notice of attornment) |
| Handover items | Original tenancy agreement, stamp certificate, inventory and spare keys |
See my SPA guide, making an offer on a subsale and backing out after the SPA.
At completion: deposits, rent and handover
A Malaysian Bar conveyancing column describes outgoings being apportioned at the date possession passes; rent is commonly split the same way.
Worked illustration
Made-up round figures. The rent is RM2,200 a month, paid on the 1st. You hold two months’ rent as security deposit and one month’s as utility deposit, the pattern a Malaysian Bar column describes as usual (custom, not law). Completion falls on the 16th of a 30-day month.
| Item | Amount | Notes |
|---|---|---|
| Rent you collected for the month | RM2,200 | Paid by the tenant on the 1st |
| Rent you keep (15 days) | RM1,100 | 1st to 15th |
| Rent credited to the buyer (15 days) | RM1,100 | 16th to 30th |
| Security deposit passed to the buyer | RM4,400 | Two months’ rent |
| Utility deposit passed to the buyer | RM2,200 | One month’s rent |
| Total credited to the buyer | RM7,700 | Usually deducted from the balance you receive |
If any deposit was already used for repairs or unpaid rent, say so before the SPA. The tenant will claim the refund from the new owner, which is why buyers insist the money moves. See rental deposit refunds.
Closing your side
- Sign the notice to the tenant with the buyer’s contact and rent account.
- Hand over the original agreement, stamp certificate, inventory and keys.
- Utilities. If an account is in your name, use TNB’s and Ranhill SAJ’s change-of-account procedures.
- Management. Tell the JMB or MC that ownership has changed.
Costs and tax: what changes with a tenant
- Stamp duty already paid on the tenancy. It is not refunded or passed on. A new or novated agreement between buyer and tenant is stamped as a new instrument: RM1 per RM250 of annual rent for up to one year, RM3 for over one and up to three years (LHDN guideline, 30 June 2026).
- RPGT is unchanged. Citizens and PRs pay 30% within three years, 20% in year four, 15% in year five and nil from year six; foreigners pay 30% up to year five and 10% after (LHDN, checked November 2026). The buyer retains 3% of the price (7% for a foreign seller) and pays it to LHDN within 60 days. See my RPGT guide.
- Rental income for the year of sale. Rent received up to completion is declared for that year, less allowable expenses (LHDN Public Ruling No. 12/2018); non-resident individuals pay a flat 30%. See my rental income tax guide.
- Agent and legal fees are as for any sale; see what sellers pay.
Selling from overseas or as a foreign owner
- You do not have to fly in for every step. Your lawyer handles the SPA and completion, and some owners use a power of attorney. See managing a JB property from overseas.
- Who can buy from you. Foreigners can generally buy Johor homes only from RM1 million, outside designated zones, and the New Straits Times reported in April 2026 that owners who bought below that under special approval can resell only to Malaysians. See Johor’s minimum price and quota.
- Sending the money home. Bank Negara Malaysia’s foreign exchange policy allows non-residents to repatriate divestment proceeds.
- MM2H owners. Check any holding-period condition first. I coordinate with a MOTAC-licensed MM2H agent on this; decisions rest with the authorities. See MM2H property support.
Foreign owners should also read selling JB property as a foreigner. To set the price, see pricing a house for sale in JB; the buyer’s view is in buying a tenanted property.
Selling to buy again? Where to look next
- Mount Austin: family condos and landed homes near schools.
- Tebrau, Setia Indah and Molek: established neighbourhoods.
- JB Sentral and Bukit Chagar: near the CIQ and the RTS Link station.
- Iskandar Puteri: Medini, EduCity and the Second Link.
- Permas Jaya and Senibong: east-side condos and waterfront homes.
- Skudai, Tampoi and Kempas: near universities and industrial areas.
Compare them on my JB property map.
More Johor living guides: Buying a tenanted property in JB · What sellers pay · Subsale arrears and apportionment · Landlord tenancy agreements in JB · Ending a tenancy early
Frequently asked questions
Can I sell my property in Malaysia while a tenant is living in it?
Yes. You can sell subject to the tenancy, so the buyer becomes the landlord at completion, or end the tenancy under the agreement’s terms and sell with vacant possession. The letter of offer and SPA should say which.
Does the tenant have to move out when I sell?
No. A sale does not end the tenancy by itself; the tenancy agreement decides. A former tenant who stays on can only be removed through the courts under section 7 of the Specific Relief Act 1950.
Who gets the tenant’s deposit when I sell?
In a sale subject to the tenancy, the security and utility deposits you hold are normally paid to the buyer, or credited against the balance price, at completion. The tenant then claims the refund from the new owner.
Can I ask my tenant to leave early so I can sell with vacant possession?
Only as the agreement allows, such as under an early-termination or sale clause with the required notice, or if the tenant agrees to surrender the tenancy. Put any agreement in writing with a move-out date and deposit refund terms.
Does my tenant have to allow viewings?
Many tenancy agreements let the landlord show the unit to buyers at reasonable times with prior notice. Check your clause and agree a schedule with the tenant; it also helps the buyer’s valuer get access.
Does selling with a tenant change my RPGT?
No. RPGT is worked out the same way, and the buyer still retains 3% of the price, or 7% for a foreign seller, for LHDN. Rent received up to completion is declared as rental income for that year.
Can I sell a tenanted Johor property from overseas?
Yes. Your lawyer can handle the SPA and completion, and some owners use a power of attorney. Foreign owners should check who can buy from them under Johor’s rules before setting the price.
Selling a tenanted home in JB?
Tell me where the property is, the rent, when the tenancy ends and whether you would rather keep the tenant or hand over an empty unit. I will suggest which route fits, share recorded prices nearby and explain how I would market it to investors or owner-occupiers. You can also book an appointment, or a Zoom consultation if you are overseas.
Sources: National Land Code (Revised 2020), section 223, tenancies not exceeding three years exempt from registration, Laws of Malaysia text, checked November 2026; National Land Code (Revised 2020), section 316, endorsement of tenancies exempt from registration, checked November 2026; National Land Code (Revised 2020), section 226, chargee’s consent to tenancies of charged land, checked November 2026; Specific Relief Act 1950 (Act 137), section 7, recovery of possession, checked November 2026; Stamp Act 1949 (Act 378), section 52, unstamped instruments in evidence, checked November 2026; Bernama, “Residential Tenancy Bill being finalised to balance rights of tenants and landlords”, 4 August 2026; Malaysian Bar Conveyancing Practice Committee column, “Tenancy agreement” (deposits, renewal, notice to vacate), accessed November 2026; Malaysian Bar Conveyancing Practice Committee column, “Understanding an SPA (Part 3)”, 5 January 2007; LHDN, Garis Panduan Pengenaan Duti Setem, First Schedule, Stamp Act 1949 (Item 49), 30 June 2026; LHDN, Real Property Gains Tax rates, checked November 2026; LHDN, retention and remittance by the acquirer, updated 25 May 2026; LHDN, responsibilities of the disposer and acquirer, updated 26 June 2026; LHDN, Public Rulings (No. 12/2018, Income from Letting of Real Property), accessed November 2026; LHDN, Who is taxable (non-resident individuals), accessed November 2026; New Straits Times, “Foreigners hit Johor property resale wall”, 20 April 2026; Bank Negara Malaysia, foreign exchange policy: non-residents investing in Malaysia, checked November 2026; myTNB, change of tenancy, checked November 2026; Ranhill SAJ, change of account name, checked November 2026
Jason Lim, REN 84424, IQI Realty Sdn. Bhd. E (1) 1584/6. General information checked on 10 November 2026, not legal, tax or financial advice. Your tenancy agreement and SPA decide what applies; confirm with your lawyer, LHDN or a tax agent, your bank and the land office before you sign.