Exercise 2

Instruction: Please draft an agreement based on the following facts. You may add or modify
the content to suit your preference.

Scenario: Megah Holdings Sdn Bhd owns a commercial property that it wishes to lease to a
tenant for use as a retail store. The company has found a potential tenant, Semarak Jaya
Sdn Bhd which is interested in leasing the property.
Terms of Tenancy Agreement:
Term of Tenancy: The term of the tenancy shall commence on the 1st day of June 2023 and
shall terminate on the 31st day of May 2028, unless otherwise extended or terminated as
provided herein.
Rent: Semarak Jaya Sdn Bhd shall pay Megah Holdings Sdn Bhd a monthly rent of
RM5,000, due on the first day of each month, beginning on June 1, 2023. The rent shall be
paid by cash, electronic transfer, or other agreed method.
Security Deposit: Semarak Jaya Sdn Bhd shall pay Megah Holdings Sdn Bhd a security
deposit of RM10,000. The security deposit shall be held by Megah Holdings Sdn Bhd to
secure the performance of Semarak Jaya Sdn Bhd's obligations under this agreement.
Use of the Property: The property shall be used solely for retail purposes by Semarak Jaya
Sdn Bhd Semarak Jaya Sdn Bhd shall not use the property for any unlawful purpose, nor
shall Semarak Jaya Sdn Bhd allow anyone else to use the property for any unlawful
purpose.
Maintenance and Repairs: Semarak Jaya Sdn Bhd shall maintain the property in good
condition throughout the tenancy and shall be responsible for any damage caused by its
neglect or misuse. Megah Holdings Sdn Bhd shall be responsible for all necessary repairs to
the property caused by ordinary wear and tear, but not for damage caused by Semarak Jaya
Sdn Bhd's negligence or misuse. Megah Holdings Sdn Bhd shall be allowed to enter the
premises to conduct the repair, provided with prior 7 days’ notice given to the tenant.
Utilities and Services: Semarak Jaya Sdn Bhd shall be responsible for paying for all utilities
and services required for the property, including but not limited to electricity, gas, water, and
internet.
Insurance: Semarak Jaya Sdn Bhd shall maintain insurance coverage for the property and
its contents, including but not limited to fire, theft, and liability insurance. The insurance
policy shall name Megah Holdings Sdn Bhd as an additional insured.
Alterations: Semarak Jaya Sdn Bhd shall not make any alterations, improvements, or
additions to the property without Megah Holdings Sdn Bhd's prior written consent. If Megah
Holdings Sdn Bhd consents to alterations, Semarak Jaya Sdn Bhd shall be responsible for
all costs associated with the alterations.
Termination: Either party may terminate this agreement upon giving 90 days' written notice to
the other party. In the event of a breach of this agreement, the non-breaching party may
terminate the agreement immediately upon written notice.
Governing Law: This agreement shall be governed by and construed in accordance with the
laws of Malaysia and any legal action arising out of or relating to this agreement shall be
brought in the courts of that state.