Can Your Landlord Double Your Rent Overnight? The Truth About Renewal Clauses (And How to Protect Your Wallet)

It is the phone call every tenant dreads and every landlord hesitates to make.

You have been living in your rental unit for nearly two years. You love the place. You have painted the walls (with permission, of course), enrolled your kids in the nearby school, and finally figured out the best shortcut to avoid the morning traffic jam.

Then, two months before your tenancy expires, your landlord calls.

“Hi, good news! I’m happy to extend your tenancy. But just so you know, the market is booming, so the new rent will be RM3,000.”

You freeze. You are currently paying RM2,000. That is a 50% increase.

You panic and check your tenancy agreement. You scan the pages looking for a law or a rule that stops this. But if you used a standard, generic template downloaded from the internet, you likely won’t find one.

In Malaysia, there is no government-mandated “rent control” for private residential properties. Unless your tenancy agreement specifically restricts it, a landlord can legally raise the rent to whatever figure they want once the term ends. If you don’t agree to the new price, you have to move out.

This scenario highlights one of the most overlooked parts of a rental contract: The Renewal Clause.

Most people assume that a “standard” tenancy agreement protects both parties equally. In reality, almost every contract is inherently one-sided—drafted to heavily favor either the tenant or the landlord.

This is the hidden danger of using a free template downloaded from the internet. You often have no idea which “side” that document was actually written for. You might think you are signing a neutral agreement, only to realize too late that you signed a contract designed to protect the other person, leaving you with zero leverage when it matters most.

The Myth of “Standard” Renewals

A common misconception in Malaysia is that a “2+1 year tenancy” automatically means you get to stay for that extra year at the same price.

This is rarely true. Usually, the “+1” just means you have an option to renew, but the terms of that renewal are often left vague. A poorly drafted agreement might say “renewal based on mutual agreement.”

In legal terms, “mutual agreement” sounds fair, but in practice, it often means: “If the landlord wants to double the rent and you don’t agree, there is no mutual agreement, and the tenancy ends.”

This is why DIY Agreement (DIYa) created two distinct versions of our tenancy packs. We treat the tenancy agreement not just as a form, but as a financial strategy tool.

Strategy A: The “Safety Net” (For Tenants)

If you are a tenant, your primary goal is cost certainty. You need to know that your housing budget won’t explode next year.

In our Pro-Tenant Edition, we structure the renewal clause to protect the tenant’s interest first.

Instead of leaving the new rental amount purely up for debate, our Pro-Tenant framework includes a Rent Hike Cap. While we won’t bore you with the legal phrasing, the concept is simple: it pre-agrees on a maximum percentage that the rent can increase by.

Typically, this mechanism ensures that if you choose to renew, the rent cannot increase by more than a specific, reasonable percentage (for example, 10%) or the prevailing market rate—whichever is lower.

Why does this matter? Imagine the market booms and rents in your condo rise by 40%.

• Without this clause: Your landlord follows the market and asks for a 40% hike.
• With the DIYa Pro-Tenant Pack: Your increase is capped at the agreed percentage (e.g., 10%). You save thousands of Ringgit over the next year, and you don’t have to move.

Furthermore, our Pro-Tenant strategy gives the tenant the “First Right of Renewal.” This means the landlord cannot simply kick you out to rent to someone else; they must offer it to you first, provided you give notice within the shorter, more flexible timeframe (usually 30 days).

Strategy B: The “Inflation Hedge” (For Landlords)

Now, let’s flip the script. If you are a landlord, your primary goal is Yield Protection.

Inflation is real. Maintenance costs, sinking funds, and assessment taxes rarely go down. If you sign a long-term contract that caps your rental increase at a low rate, you might find yourself subsidizing your tenant’s lifestyle three years from now.

In our Pro-Landlord Edition, the strategy is completely different. We remove the “automatic” right of renewal and the price cap.

Instead, the renewal clause in the Landlord pack explicitly states that any renewal is subject to the Landlord’s agreement and may be granted on revised terms.

Why does this matter? Let’s say a new MRT station opens right in front of your condo, or a new international school is built next door. Suddenly, demand spikes.

• With a Capped Clause: You are stuck increasing rent by only a small percentage, earning far below what your neighbors are getting.
• With the DIYa Pro-Landlord Pack: You have the leverage. You can look at the current market rate and propose a new rental amount that reflects the true value of your property. If the current tenant disagrees, you have the right to find a new tenant who will pay the market price.

Additionally, our Landlord-focused strategy requires a longer notice period from the tenant (typically 90 days) if they wish to renew. This gives you, the landlord, a massive advantage: a three-month head start to find a new high-quality tenant if the current one decides to leave.

The Danger of “Middle Ground” Templates

This is the problem with using a free, generic template you found on a forum. It tries to please everyone and ends up protecting no one.

It might be vague about the price (“rent to be discussed”), which leads to arguments. Or it might be vague about the notice period, leading to a scramble on move-out day.

When you enter a tenancy, you are entering a business relationship. Like any business deal, the terms should be clear, and they should support your goals.

Don’t Leave Your Future to Chance

The difference between a 10% rent hike and a 50% rent hike isn’t luck—it’s paperwork.

At DIY Agreement, we believe you should know exactly what you are signing. That is why we don’t just sell “a tenancy agreement.” We provide tailored, bilingual solutions that let you choose the level of protection you need.

Whether you want to lock in a low rate or keep your options open for the open market, the secret is in the clauses. Don’t wait until the phone rings two years from now to wish you had a better contract.

Secure your financial future today. Choose the pack that puts you in control.