Rental Disputes & Small Claims Court Malaysia 2026: Deposit Guide
Disputes between landlords and tenants—such as landlords illegally withholding security deposits after lease expiry, or tenants absconding with unpaid rental bills—are common occurrences in Malaysia's private rental market.
When the financial claim is below RM5,000, engaging a litigation lawyer is financially impractical due to high legal fees. Fortunately, the Malaysian judicial system provides a fast, low-cost legal self-help avenue: Small Claims Court (Mahkamah Tuntutan Kecil) under Order 93 of the Rules of Court 2012.
This 2026 legal guide explains how landlords and tenants can file a claim at the Small Claims Court without hiring a lawyer, required court forms (Form 198), filing fees (RM20), and enforcing court judgments.
At a Glance: Small Claims Court Key Parameters 2026
| Metric / Aspect | Small Claims Court Rules |
|---|---|
| Maximum Claim Jurisdiction | Up to RM5,000 (Claims above RM5,000 must be filed in Magistrates Court) |
| Legal Representation Rule | No Lawyers Allowed (Both parties must represent themselves in court) |
| Court Filing Fee | RM20 (Filing fee for Writ of Summons Form 198) |
| Average Resolution Time | 1 to 3 Months from filing date to trial judgment |
| Eligible Claim Types | Unreturned security/utility deposits, unpaid monthly rent, property damage repairs |
1. When Should You Use Small Claims Court?
For Tenants: Recovering Unreturned Security Deposits
If a landlord refuses to return your 2-month security deposit (e.g., RM3,000) after you have handed over keys and cleared all utility bills without valid justification, you can sue the landlord in Small Claims Court.
For Landlords: Recovering Unpaid Rent & Utility Bills
If a tenant vacates your property leaving RM2,500 in arrears or utility bill defaults, you can file a claim to compel payment.
2. Step-by-Step Small Claims Court Procedure
Prepare Evidence -> File Form 198 at Magistrates Registry -> Pay RM20 Fee -> Serve Summons on Defendant -> Attend Court Trial -> Obtain Court Judgment
Step 1: Issue a Formal Letter of Demand (LOD)
Before going to court, send a written Letter of Demand via registered post giving the defaulting party 14 days to settle the debt.
Step 2: File Form 198 at the Magistrates Court Registry
Visit the nearest local Magistrates Court (Mahkamah Majistret) registry. Fill out Form 198 (Writ of Summons for Small Claims) stating:
- Full names, MyKad NRIC numbers, and last known residential addresses.
- Exact monetary amount claimed (must not exceed RM5,000).
- Concise summary of facts (referencing the stamped Tenancy Agreement).
Step 3: Pay the Court Filing Fee (RM20)
Pay the RM20 registration fee to receive court-sealed copies of Form 198 with a fixed court hearing date.
Step 4: Serve Form 198 on the Defendant
Deliver a copy of Form 198 to the defendant via Registered Post (AR Registered) or personal delivery. The defendant has 14 days to file a defense (Form 199).
3. What Happens During the Court Hearing?
- Informal Magistrate Session: The hearing takes place in a Magistrates Court room before a Magistrate. Proceedings are conducted informally in Bahasa Malaysia or English.
- Evidence Review: Both parties present documentary evidence (Stamped Tenancy Agreement, WhatsApp messages, bank transfer receipts, move-out inspection photos).
- Judgment Enforceability: If the defendant fails to attend, the Magistrate issues a Default Judgment (Penghakiman Ingkar) in favor of the plaintiff.
4. Enforcing the Court Judgment
If the defaulting party still refuses to pay after a court judgment is issued, the Magistrate Court can enforce payment via:
- Garnishee Proceedings: Court orders the defaulting party's bank to freeze and transfer funds directly to you.
- Writ of Seizure and Sale: Court bailiffs seize and auction the debtor's movable goods to recover the judgment sum.
Frequently Asked Questions (FAQ)
1. Can a corporation or company file a claim in Small Claims Court? No. Under Order 93, Small Claims Court is strictly reserved for individual persons. Companies or Sdn Bhd entities cannot file as plaintiffs in Small Claims Court.
2. Is a Tenancy Agreement legally admissible in court if it was not stamped at LHDN? Under the Stamp Act 1949, an unstamped tenancy agreement cannot be admitted as legal evidence in court until it is submitted to LHDN for post-stamping with nominal penalty fees.
3. What if my deposit claim is RM6,500 (above the RM5,000 limit)? You can choose to abandon the excess RM1,500 claim amount in your Form 198 to bring the claim within the RM5,000 limit and utilize the low-cost Small Claims Court process.
Related Resources
- Tenancy Law: Read our Tenancy Agreement Malaysia guide.
- Eviction Procedures: Explore How to Evict Tenant Malaysia.
- Landlord Rights: Learn about Landlord Rights Malaysia.
