Can a landlord charge double rent for non-delivery of vacant possession if the tenant delays in handing over the property?
ROHASASSETS SDN BHD V. WEATHERFORD (M) SDN BHD & ANOR  1 LNS 1783
- Rohasassets Sdn Bhd (“Landlord”) is the registered owner of a commercial building known as Rohas Perkasa (“Said Premises”).
- The Landlord had let out the Said Premises to Weatherford (M) Sdn Bhd and Weatherford Solutions Sdn Bhd (collectively, the “Tenants”).
- Before the expiry of the tenancies which was almost 10 years later, the parties began negotiations for renewal of the tenancies.
- Negotiations continued even after the expiry of the tenancies and dragged on for more than 2 years during which the Landlord expressly reserved its right to charge double rent and consistently reminded the Tenants both before and after the expiry of the tenancies to make payment but the Tenants did not do so.
- During this period however, the Landlord accepted the normal rent paid by the Tenant.
- The Tenants knew of the Landlord’s right to charge double right and in fact, pleaded for it to be waived, especially in the event of renewal of the tenancies.
- Negotiations for the new tenancies eventually failed and the Landlord, by its letter, terminated the tenancies and gave notices to the Tenants to quit and deliver vacant possession of the Said Premises (“Said Notices”).
- The Tenants did not challenge the termination nor the Said Notices but took an additional 1 month to vacate the Said Premises (although their request for extension was refused by the Landlord).
- In total, the Tenants held over 30 months on the 11th floor; 31 months on the 12th floor and 9 months on the 14th floor from the expiry of the tenancies to the delivery of vacant possession.
- After a full trial of the action, the High Court dismissed the Landlord’s claim for double rent and allowed the Tenants’ counterclaim for a refund of the deposits.
- The Landlord appealed to the Court of Appeal.
- The Court of Appeal allowed the appeal in part and ordered the Tenants to pay double rent but only for the period from the expiry of the Said Notices up to the date of delivery of vacant possession and not for the period commencing from the expiry of the tenancies up to the date of delivery of vacant possession as claimed by the Landlord. This means that the Landlord is only entitled to 30 days of double rent instead of 30 months.
- The Landlord appealed to the Federal Court.
FEDERAL COURT DECISION – APPEAL DISMISSED!
The Federal Court held that it is clear that the Tenants’ holding over was with the tacit approval of the Landlord.
The Landlord accepted tenders of rent from the Tenants without any complaint and did not issue any notice to quit, not until after the failure of the negotiations, and this too was done some 2 years after the expiry of the tenancies.
Therefore, the Tenants were tenants at will and not tenants at sufferance and were not trespassers during the period the parties were negotiating for renewal of the tenancies.
The Tenants only became trespassers from the date of expiry of the Said Notices up until the date they gave up vacant possession of the Said Premises. The Court of Appeal was therefore correct in ordering double rent to be charged only for the period commencing from the date of expiry of the Said Notices until the date of delivery of vacant possession.