I rented a shoplot for retail business and after about 6 months every month is just losing money. The total sales is unable to cover the rental and employee salary.

So we decided to close the business. However after informing the landlord that we want to stop the rental, the landlord showed us that there was a clause saying we have to pay for the rest of the tenure if we choose to terminate the agreement early. I admit it's my bad for not reading the agreement carefully before signing it. Now they insist we have to pay the rest of the 2 year tenure or get a new tenant.

Anyone experienced this before? What's the solution?

Haih. Thanks for the info. I took for granted and thought normally rental agreements are almost the same. If we quit they'll just take the deposit.

Not break even but just didn't expect to lose that much cos there were many days that sales was zero or single digit.

It's kinda like a start-up

Ya we didn't expect for the sales to be so bad. There were quite many days having 0 sales. And the condition of the shop is also quite poor. The roof leaks during rain and when I inform the management they just come and use silicone to seal the holes in the roof. They walls even grew mould cos there's a big gap at the wall allowing water to sip in. I told the management a few times but nothing is done

The property is owned by a foreign company and they assigned a local management company to manage it. I'm worried if any legal action will be taken against me

Selling Japanese goods. Nope we didn't make money at all for first 6 months, every month need to top up to cover overhead. We thought about trying to hold on but it's quite a big gamble to take since the past 6 months have all been losses.


This is part of the termination or break option as per the agreement.

Break Option which states that you are liable to pay a
sum equivalent to the rental for the remaining term of the lease subject to a maximum of 18 months rental plus 3 months rental in lieu of notice.

Notice to give is 3 months but that is followed by the clause above. Ya I've tried to explain nicely to the landlord, apologising and saying we're unable to continue as business is very bad. Hope they have mercy on me.

The business is under partnership but the tenancy is under my single name. That's the part I'm worried.

Exactly. I asked around some people who have law background and they said the agreement looked ridiculous. I'm not sure the company who owns the property did it or the secretarial firm they appointed drafted it.

I informed them I admit not reading the agreement carefully before signing it because when I asked about termination, they just told me it's a standard agreement, you'll lose your deposit. Now waiting for their reply.

Wow didn't realise this topic escalated so quickly. Chill guys. It's my first time renting a commercial unit and I admit doing a few mistakes.
1. The business startup was quite messy as our partnership company was registered after we agreed to rent the shoplot. I agreed to use my name first since there's no company name. If we rented the shop using company name I'll be less worried

2. I didn't read the TA carefully. I went to their office to sign the 20+ page TA. I casually ask what if I want to stop renting before 2 years, and the staff just tell me you'll lose your deposit lo. So I didn't read much and apparently the person that I dealt with didn't read the TA as well.

I'm now trying to appeal to the landlord still hoping for the best. I do agree to most of the points you guys mentioned but let's not get heated la. Malaysia very hot d. Haha