Long shop leases: 5+5, 10-year terms, first refusal and early exit

A 5+5 is a five-year fixed term with an option for the tenant to renew for five more years. Long terms make sense when you spend heavily on fit-out and the location is proven. Two legal points shape them: fixed terms over three years, or renewals taking the total over three years, may be treated as a lease needing registration under the National Land Code (LH Low & Associates), and stamp duty rises with the term. Cap the renewal rent in writing, and agree how either side can end early.

This is general information, not legal advice. Have your lawyer draft and review any lease over three years.

The same structure as the common 2+2 tenancy, only longer:

The option is usually the tenant's right if you give notice on time and are not in breach.

Yes. Ten years can be a straight term or a 5+5. Compared with a short tenancy, a long term brings more formality:

• Registration. Terms over three years may need registration as a lease under the National Land Code. Registration is what puts a lease on the title, so ask your lawyer whether and how to register yours.
• Stamp duty. Per RM 250 of annual rent: RM 3 for 1 to 3 years, RM 5 for 3 to 5 years and RM 7 over 5 years (SPEEDHOME). Stamp within 30 days of signing.

On RM 10,000 a month (RM 120,000 a year), that is about RM 1,440 for a two-year term, RM 2,400 for a five-year term and RM 3,360 for a term over five years. How an option to renew affects the band is a drafting question for your lawyer. Check your own figures with the stamp duty calculator and the stamp duty guide.

Fix the formula now. Options, from strongest to weakest for the tenant:

1. Fixed step: for example a stated percentage at year 6. Certain and easy to budget.
2. Market rate with a cap: the review follows the market but cannot exceed a stated percentage; add an independent valuer to settle disputes.
3. To be mutually agreed: almost no protection; avoid it.

Within a five-year first term, agree whether the rent is flat or steps up at set dates. Lease terms a chain brand can negotiate shows what landlords in prime hubs usually accept.

You can ask; the landlord does not have to agree. A right of first refusal means that if the owner decides to sell, they must offer the shop to you first. A workable clause states:

• how the owner notifies you and at what price
• how many days you have to accept and to sign
• that if you decline, the owner cannot sell to someone else on better terms without offering them to you again

It is not an option to buy at a fixed price, and it does not force a sale. Ask your lawyer how to protect it if the title changes hands, and how a sale affects your tenancy.

Only on grounds in the agreement. Typical ones are your breach, such as unpaid rent or an unapproved use, after written notice. Some agreements also let the landlord end the term for redevelopment or a sale; strike these out or ask for compensation and long notice. Even when a landlord has grounds, commercial landlords cannot change the locks, cut utilities or remove belongings without a court order, because s7(2) of the Specific Relief Act 1950 bars self-help eviction (Ben Lee & Sharen, 14 Jul 2026).

Whatever the agreement allows, and often more than the deposit. Shop deposits are commonly two to three months' rent plus a utility deposit (SPEEDHOME), and many agreements let the landlord keep the security deposit if the tenant ends the term early, and claim further losses. Over ten years that exposure is large, so negotiate a break clause: exit only after an initial period, long written notice, a set fee in months of rent, and fit-out left behind if the landlord wants it. See how shop deposits work.

Only if the agreement says so. Ask for the tenancy to be subject to your licence being approved by a stated date, with deposits refunded if it is refused for reasons outside your control. Do the checks first: CCC, zoning and Bomba before you renovate.