8 tenancy clauses to check before renting a shop (2026 Malaysia)

8 tenancy clauses to check before renting a shop (2026 Malaysia)

The 8 shop tenancy clauses Malaysian tenants should check in 2026: term, rent review, deposits, use, fit-out, repairs, assignment and termination.

Published 12 Nov 2026 · Updated 14 Nov 2026
Written by
Tok Ginstee
Tok Ginstee
REN 37505 · CID Realtors Sdn Bhd (E (1) 1855)
Short answer

Short answer

Before signing a shop tenancy, check eight clauses: term and renewal, rent review, deposits, permitted use, fit-out and rent-free period, repairs and reinstatement, assignment and subletting, and termination and notice. These decide what the shop really costs over the term. This is general information, not legal advice.

The 8 clauses at a glance

The 8 clauses at a glance

# Clause What to look for
1 Term and renewal 2+2 or 3+3, renewal notice window, whether renewal is your option
2 Rent and rent review Fixed increase or market rate, any cap
3 Deposits Amounts, deduction rights, refund deadline
4 Permitted use Your exact trade written in, licences
5 Fit-out and rent-free period Landlord approvals, start date of rent-free period
6 Repairs and reinstatement Who fixes what, condition on return
7 Assignment and subletting Consent rules, change of control
8 Termination and notice Notice period, default, early exit
1. Term and renewal

1. Term and renewal

Most shop tenancies are 2+2 or 3+3. LH Low & Associates notes that 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, which is why short terms with options are common. Make sure renewal is your option, not "subject to agreement", and diarise the notice deadline. See what a 2+2 tenancy means.

2. Rent and rent review

2. Rent and rent review

Check the rent for each period, when it is paid, and how renewal rent is set. A fixed increase is easier to plan for than an open market review. In busy hubs the swing can be large. Based on MCE analysis of portal adverts from the last six months (Nov 2026, shop units only, duplicate and bait adverts removed, middle half of asking prices), typical asking rents run RM 10,000 to RM 17,000 a month in SS2 Petaling Jaya and RM 8,500 to RM 22,000 in Sunway Mentari.

3. Deposits

3. Deposits

SPEEDHOME puts the usual deposits at two to three months' rent as security plus one month for utilities, about three to four months' rent upfront including advance rent. Make sure the agreement lists what can be deducted and how many days the landlord has to refund. Our deposit guide has examples.

4. Permitted use

4. Permitted use

Write your trade precisely, for example "restaurant serving cooked food" rather than "retail". If the landlord has restrictions, such as no pork, no alcohol or no competing trade in the row, you need to know now. Confirm the unit can be licensed for your trade by the local council.

5. Fit-out and rent-free period

5. Fit-out and rent-free period

Ask for a rent-free period for renovation and make it start at handover of vacant possession, not at signing. Record which works the landlord approves, such as exhaust ducts, signage and roof works. For food businesses, read our restaurant services guide.

6. Repairs and reinstatement

6. Repairs and reinstatement

Who repairs the roof, structure, external walls and main services? Who repairs internal fittings? At the end, must you return the shop to bare shell, or can you leave fixtures? Reinstatement is a frequent cause of deposit disputes. Attach photographs of the unit at handover.

7. Assignment and subletting

Subletting and assignment need the landlord's prior written consent. Without it you are in breach, and paying goodwill does not buy a tenancy. Ask for consent "not to be unreasonably withheld" and the right to assign within your group of companies. More in our sublet and assignment guide.

8. Termination and notice

Malaysian commercial tenancies usually require three months' written notice (LH Low). Check what counts as default, how many days you have to fix a breach, and whether there is any early exit right, for example if your licence is refused.

What else should you confirm?

  • Stamp duty. The RM 2,400 exemption was removed from 1 January 2025; for one to three year terms the rate is RM 3 per RM 250 of annual rent, and stamping is due within 30 days (SPEEDHOME). See our stamp duty guide.
  • Service charges, quit rent and assessment. Who pays which outgoing.
  • Insurance. Landlord's building insurance and your contents and public liability cover.
  • Signage. Size and position allowed.

How should you use this checklist?

  1. Ask for the draft agreement before paying the earnest deposit if you can, or make the deposit refundable if terms are not agreed.
  2. Mark each of the eight clauses as agreed, to negotiate or unacceptable.
  3. Ask a lawyer to review the final draft.
  4. Keep a signed copy, the stamp certificate and the handover photos together.

Look up terms in the glossary, compare rents on the shop rent index, or contact us if you would like a second pair of eyes on an offer.

This is general information, not legal advice.

Written by Tok Ginstee (REN 37505), CID Realtors Sdn Bhd (E (1) 1855). Updated November 2026.

FAQ

Frequently asked questions

Should I get a lawyer to review a shop tenancy agreement?

Yes. A shop tenancy commits you to years of rent and reinstatement costs. A lawyer's review of the eight key clauses usually costs far less than one dispute.

What is a rent-free period in a shop tenancy?

It is a period, agreed in the tenancy, when you renovate without paying rent. Ask for it to start when you receive vacant possession, not when you sign.

What does reinstatement mean in a tenancy agreement?

It is your obligation to return the shop in a stated condition at the end, often bare shell. Removing kitchens, ducts and partitions can be costly, so agree the standard in advance.

Can the landlord increase rent during a 2-year term?

Only if the agreement allows it. Most fixed terms keep the rent fixed, with changes at renewal. Read the rent clause for any mid-term review.

The best shops in prime hubs never go online

Every shop and price on this site is a market range, so you know what an area costs. Prime ground-floor units in busy hubs are usually let or sold quietly, before any banner or portal advert, and we offer them first to people who have already told us what they need. If you want to rent, buy or sell in a prime area, WhatsApp us your area, size, budget and trade, and we will send matching units as soon as they come up.

Free location advice: Not sure where your brand fits? Tell us your trade, target customers and budget, and we will recommend the hubs and streets that suit you best, free of charge.

Free location advice

Why work with MCE:for tenantsfor buyers and investorsfor landlords

More insights