Unpaid Utility Bills — How Malaysian Landlords Can Protect Themselves Before It Happens

Unpaid electricity, water, and Indah Water bills are among the most common and frustrating surprises for Malaysian landlords. Sometimes the tenant moves out suddenly, sometimes they leave quietly without settling the last few cycles, and sometimes the final bill arrives weeks after handover — only for the landlord to discover outstanding amounts.

And because Malaysia doesn’t have a fully implemented Residential Tenancy Act yet, landlords rely entirely on what’s written in the tenancy agreement and on their own documentation. When those things are unclear, unpaid utility bills quickly turn into stressful disputes.

The good news is that this is one of the easiest problems to prevent. With the right preparation and a few simple systems, landlords can eliminate almost all risks of being stuck paying their tenant’s bills.

This article explains why unpaid utility bills happen, the steps landlords can take during the tenancy, and how a clear agreement — especially a bilingual one — helps both sides understand their responsibilities from day one.

Why Unpaid Utility Bills Happen

Most landlords assume that as long as tenants are paying rent, utilities will automatically be handled. But in reality, unpaid bills are often the result of small misunderstandings that grow over time. Some tenants delay payment and let charges accumulate for months. Some utilities cannot be transferred into the tenant’s name, so the owner remains legally responsible. In many condos, water or aircond usage runs on a shared meter, which requires manual calculation.

Other cases happen because the tenant moves out abruptly. They may lose their job, break up with a partner, or relocate suddenly and leave without settling the final utility cycle. Since TNB, Syabas or Indah Water bills don’t always arrive immediately, the outstanding amounts only appear after the tenant has already gone.

And in many cases, everything boils down to one issue: the tenancy agreement did not clearly explain who should pay what, when proof must be given, and how the Utility Deposit will be used.

Step 1 — Put the Utilities Under the Tenant’s Name Whenever Possible

This is the most important step and the simplest one.

When utilities are under the tenant’s name, the landlord is no longer legally or financially responsible for unpaid bills. The tenant deals directly with TNB, Air Selangor, and Indah Water, and any delay or disconnection affects them, not you. It also reduces arguments, because the tenant can see their own billing history.

However, not all utilities can be transferred. In many strata properties, water accounts remain under the building management or the owner’s name. For older condos, some aircond systems use a shared electricity meter. In these cases, you can’t avoid keeping the account under your name — but you can avoid misunderstandings by setting clear rules from the start.

This is where a good tenancy agreement matters. A clear clause stating the tenant is responsible for all usage and must reimburse the landlord promptly prevents arguments later.

Step 2 — Use a Proper Utility Deposit and Explain It Clearly

Many landlords underestimate how important the Utility Deposit is. While the Security Deposit covers damage, the Utility Deposit is your financial buffer against unpaid electricity, water, sewerage, and even shared-meter usage.

It’s reasonable to collect half a month to one full month’s rent as Utility Deposit, depending on the property type. The amount should be clearly stated in the agreement, along with a simple explanation of how it will be used. Most landlords forget one crucial detail: utility bills often arrive after the tenant has moved out. Without a clear clause explaining that the Utility Deposit covers incoming final bills, disputes can arise.

When tenants understand this from the beginning — especially when explained in English and Bahasa Malaysia — the move-out process becomes much smoother.

This is why the DIYA tenancy pack includes a bilingual Utility Deposit clause with clear wording, so tenants won’t later say, “I didn’t know this is how it works.”

Step 3 — Request Proof of Payment During the Tenancy

Many landlords check rent every month but never check utilities. Utility arrears grow quietly because tenants seldom admit when they are behind. The easiest solution is to build a simple habit into your communication:

Ask for proof of utility payment every month, or at least once every 2–3 months.

A simple WhatsApp message — “Hi, can you send me the latest TNB/water receipt for record? Thank you!” — is enough. Most tenants won’t object because it’s stated clearly in the agreement.

If you want to be more structured, you can request receipts quarterly, which avoids micromanaging but still protects you. This ensures you catch problems early — before bills pile up into hundreds or thousands.

Again, this works best when your agreement spells it out clearly. When tenants sign a document that says they must provide receipts if requested, they rarely push back.

Step 4 — Take Meter Photos on Move-In and Move-Out Day

Meter readings may feel like a small detail, but they are powerful evidence. Take clear, timestamped photos of:

• Electricity meter
• Water meter
• Any shared-meter readings (if applicable)

Do this during handover when the tenant moves in, and again when the tenancy ends.

If the tenant disputes a bill later (“This usage is from the previous tenant, not me”), the meter photos settle the issue instantly. This is especially important for:

• High-usage units
• Units with water leakage history
• Units with shared or partially shared meters
• Tenants who moved in mid-billing cycle

It’s a simple habit that can prevent unnecessary arguments.

Step 5 — For Shared Meter Properties, Put Everything in Writing

Many older condos or rooms-for-rent setups use shared electricity or water meters. Landlords often split the bill based on “reasonable estimation,” but what is reasonable to you may not be reasonable to the tenant.

To avoid disputes:

• Get the JMB or management’s official formula.
• Explain clearly how the tenant’s portion is calculated.
• Include the calculation method in your tenancy agreement.
• Provide monthly or periodic breakdowns if needed.

Avoid vague statements like “We split equally” unless it is genuinely fair. The more specific you are, the fewer disputes you will face later.

Step 6 — What to Do if Bills Are Unpaid at the End

When the tenancy ends and there are outstanding bills, the correct approach is structured and calm.

First, verify the total amount owed.

Second, deduct it from the Utility Deposit.

Third, provide the tenant with a breakdown or receipts.

Finally, refund the balance (if any) within the timeline stated in the agreement.

If the outstanding amount exceeds the Utility Deposit, you may request reimbursement. But realistically, most landlords recover only what is documented properly. That is why all the earlier steps — receipts, meter photos, written clauses — matter so much.

What you should never do is take matters into your own hands, such as shutting off water or electricity. Those actions can be considered harassment and may complicate the situation further.

Preventing the Problem Altogether

At the end of the day, unpaid utility issues almost always come from:

• Unclear agreements
• No Utility Deposit
• Poor documentation
• Lack of communication
• Tenants who don’t fully understand the clauses

All of these are preventable.

A good agreement sets expectations before problems happen. Clear documentation prevents arguments later. Simple communication keeps everyone accountable.

This is the reason our DIYA bilingual tenancy agreement pack includes clearly defined utility deposit clauses with guidebook for both tenant and landlord.

When both landlord and tenant understand their responsibilities in two languages, disputes become far less likely.

Conclusion

Unpaid utility bills are an unnecessary headache — but a very avoidable one. The key is preparation, not reaction. Put the utilities under the tenant’s name whenever possible, use a clear Utility Deposit clause, request receipts periodically, document meter readings, and put shared-meter rules in writing.

With the right system and a well-structured tenancy agreement, landlords can protect themselves and avoid the financial surprises that catch so many people off guard.