Letting Your Factory in Rawang or Shah Alam: How to Screen a Tenant and Protect Yourself in the Lease

Key Takeaways

• Screen the company, the people and the trade. A tenant that pays on time can still leave you with a licence problem, an insurance dispute or a yard of waste.
• Company checks: an SSM company search, the latest accounts, and a credit report with the directors' consent. For a new or small company, take a personal guarantee from the directors.
• Trade checks: the trade must fit the land title, the council's licence for that address, the fire certificate if one is needed, and what your insurer was told.
• Lease protection: permitted use, deposits, a reinstatement clause that includes removing waste, a duty to notify changes, and the tenant's own insurance.
• If rent stops, a written lease, stamped on time, gives you the remedies. FactoryHub's guide to the writ of distress explains how landlords recover unpaid rent.

Owners of factories and warehouses in Rawang and Shah Alam usually ask me two questions when a tenant is found: how much deposit to take, and whether the tenant is safe. The deposit is the easy part. This guide covers the rest, from my side as the agent who brings the tenant and prepares the paperwork with your lawyer. It is general information, not legal advice.

Check the company and the people behind it

1. Company search. Get an SSM company profile through SSM: registration date, directors, shareholders, paid-up capital and registered address. A company formed last month to sign your lease is a different risk from one trading for fifteen years.
2. Accounts. Ask for the latest audited accounts or management accounts. You are looking for whether the rent is a small or large share of what the business earns.
3. Credit report. Commercial credit reports on the company, and on the directors with their written consent, show court cases and payment records.
4. Track record. Ask where the tenant operates now and why it is moving. A call to the current landlord, with the tenant's permission, tells you more than any form.
5. Personal guarantee. For a small or new company, ask the directors to guarantee the lease personally. Without it, a company that closes leaves you with a claim against an empty shell.

Check that the trade fits the property

This is where most problems start, and where owners are exposed even when rent is paid.

• Land title and zoning. The title's category and conditions must allow the use. A trade that needs medium or heavy industrial zoning cannot be licensed on a light industrial lot.
• Council licence. The tenant needs a licence from the council for that address, for example Majlis Perbandaran Selayang for Rawang, Majlis Perbandaran Hulu Selangor for Serendah and MBSA for Shah Alam. Make the lease conditional on the tenant applying promptly, and ask for a copy once issued.
• Environment. Trades that produce scheduled waste must store and dispose of it through DOE-licensed contractors under the Environmental Quality (Scheduled Wastes) Regulations 2005. Ask how the tenant handles its waste now.
• Fire certificate and power. A change of use or higher racking can affect the fire certificate. A tenant that needs far more power than the unit has will ask you to upgrade; agree who pays before signing.

Be careful with trades that bring heavy waste, chemicals, unlicensed recycling or large worker numbers on site. If a tenant's operation is unlicensed or unauthorised, enforcement such as closure notices can reach the premises, and you are left with an empty unit, a damaged reputation in the estate and possibly a clean-up bill.

Tell your insurer, and require the tenant's own cover

Your building insurance is priced on what happens inside. Tell your insurer when a new tenant moves in and what it does; Lulu Loke's note on insuring a property you let out makes the same point. Require the tenant to insure its own machinery, stock and fit-out and to carry public liability, and to send you a copy each year. FactoryHub's guide to who insures what between landlord and tenant sets out the full split and the lease clause.

Lease clauses that protect the owner

Clause	What it should say
Permitted use	The exact trade; no change without written consent
Deposits	Security deposit plus utility deposit; a separate reinstatement deposit for heavy fit-outs
Licences and compliance	Tenant obtains and keeps all licences; tenant bears fines caused by its operation
Alterations	No structural works, mezzanines or power upgrades without consent and approved plans
Waste and reinstatement	At the end, remove all waste, chemicals, machinery and fit-out, and return the unit as agreed; landlord may do it at the tenant's cost
Insurance	Tenant's policies, minimum public liability, annual proof; duty to notify change of process
Guarantee	Directors' personal guarantee where agreed
Default	Interest on late rent, the landlord's right to end the lease after notice

Stamp the tenancy within 30 days. FactoryHub's tenancy stamp duty calculator gives the duty for your rent and term.

When things go wrong

If rent stops, act early: a formal notice, then legal advice. A writ of distress lets a landlord seize goods on the premises to recover unpaid rent through the court. If a tenant disappears and leaves machinery and waste, do not throw things away yourself; get legal advice first, because ownership of what is left behind and the waste rules both matter.

How I handle tenant screening

When I bring a tenant for a factory in north Selangor, I collect the company search, a description of the process, the power and loading needs and the licences the tenant expects to need, and pass them to the owner before any deposit is taken. Owners who want to let a factory can WhatsApp Jason Low on +60 12-288 1834.