The Battle of Rental Deposit: “Fair Wear and Tear” vs. “Damage” in Malaysia

It is the most dreaded moment of any tenancy: The Handover.

You have moved out, the house is empty, and you are waiting for that notification that your 2.5-month deposit has been refunded. Instead, you get a text from the landlord: “I need to deduct RM500 for the wall paint and the worn-out sofa cover.”

As a tenant, you view it as ‘wear and tear’—the natural result of time. As a landlord, you view it as ‘damage’—a defect that needs to be paid for.

Who is right?

In Malaysia, where a specific Residential Tenancy Act is still being discussed, the answer usually depends entirely on one thing: The specific wording of your Tenancy Agreement.

If you are relying on a generic template you found online, you might be walking into a financial trap. Here is the reality of “Fair Wear and Tear” versus “Damage,” and why the details in your contract matter more than you think.

What is “Fair Wear and Tear”?

“Fair wear and tear” refers to the natural deterioration of a property that happens simply because someone is living there. It is inevitable. No matter how careful a tenant is, carpets will tread down, curtains will fade from sunlight, and furniture will age.

In general, a landlord cannot deduct money from the deposit to fix these natural occurrences. You cannot charge a tenant for “upgrading” your property back to brand-new condition if the items were simply old.

However, vague contracts often lead to disputes here. Does a 10-year-old air-conditioner breaking down count as “wear and tear”? Or is it the tenant’s fault for not servicing it?

What Counts as “Damage”?

Damage is different. This is harm caused by negligence, misuse, or accidents.

If a tenant punches a hole in the door, spills red wine on the carpet, or tears the sofa because they forgot to trim their cat’s claws—that is damage. In these cases, the tenant is financially responsible for repairs or replacements.

But here is where it gets messy. What about dirty walls? What about a house that is left messy but not “broken”?

The “Standard Template” Trap

Most free templates are dangerously vague. They might just say: “The Tenant must keep the property in good condition.”

This leaves a massive grey area.

• Landlords: If the contract doesn’t explicitly say you can deduct for “cleaning” or “repainting,” the tenant can argue that a dusty house is just “wear and tear” and demand their full deposit back.
• Tenants: If the contract doesn’t explicitly mention “aging of appliances,” the landlord might try to make you pay for a new fridge just because the old one stopped working during your stay.

How the Right Agreement Solves This

Since the law is general, your Tenancy Agreement is the ultimate authority. At DIY Agreement (DIYa), we have drafted our packs to close these loopholes, but we do it differently depending on your role.

1. The Pro-Landlord Approach

If you own the property, your priority is protecting your asset’s value. You shouldn’t have to pay out-of-pocket to clean up a tenant’s mess.

• The DIYa Solution: Our Pro-Landlord Edition is stricter. It includes specific clauses that allow you to deduct costs not just for damages, but specifically for cleaning costs, pest control, and repainting if the unit isn’t returned in a tenantable state. This gives you the clear legal right to restore the unit using the deposit.

2. The Pro-Tenant Approach

If you are renting, your priority is protecting your cash. You shouldn’t be responsible for the landlord’s old assets failing.

• The DIYa Solution: Our Pro-Tenant Edition includes a vital shield. It explicitly states that you must return the property in good condition, but it adds a specific exception for “normal aging of fixtures and appliances”. This one line can save you thousands of Ringgit if an expensive appliance breaks due to old age rather than your misuse.

3 Practical Steps to Avoid the Argument

Regardless of which agreement you use, you can prevent disputes by following the “Practical Tips” found in our Guidebooks:

1. Document Everything Day One: Before moving in, take dated photos or videos of the walls, floors, and furniture. If there is a scratch, photograph it. This protects tenants from being blamed for pre-existing defects.
2. Use the Inventory List: Your agreement should come with a Schedule B (Inventory). Check every item. If it’s not on the list, or if the condition is listed wrong, correct it immediately.
3. The Joint Inspection: Never just drop the keys in the mailbox. Schedule a joint inspection where both Landlord and Tenant walk through the unit together to agree on damages before the handover is finalized.

Conclusion

A tenancy dispute is often just a misunderstanding caused by a bad contract. Whether you are a landlord protecting your investment or a tenant protecting your savings, do not leave your “Wear and Tear” definition up to chance.

Don’t sign a contract that doesn’t protect you.