Telltale signs your rental unit may be used for illegal activities

KUALA LUMPUR (Jan 30): Renting out residential property carries inherent responsibilities for owners, particularly in ensuring that units are used for lawful and intended purposes. 

A recent raid by the police, which uncovered a drug processing syndicate at a luxury condominium unit in Kuala Lumpur, has served as a reminder for landlords to be more vigilant in scrutinising potential tenants.

Chur Associates founder and managing partner Chris Tan told EdgeProp that residential tenancy agreements are intended strictly for residential use. When a landlord has no knowledge of unlawful or non-residential activities taking place, liability generally does not arise. However, once a landlord becomes aware—or can reasonably be inferred to have knowledge of such activities—inaction may be construed as aiding or abetting an offence.

He noted that activities such as bitcoin mining in a residential unit, which involve unusually high electricity consumption, may constitute commercial use within a residential property. Similarly, if a property is knowingly used for illegal activities such as scam operations or drug-related offences, the landlord’s omission to act after gaining knowledge could expose them to legal consequences.

The property legal expert highlighted that tenancy agreements in Malaysia are not standardised, and the absence of a Residential Tenancy Act means disputes are assessed on a case-by-case basis. 

Landlord–tenant relationships are largely governed by common law principles inherited from the British legal system, particularly the tenant’s right to “quiet enjoyment”. Once rent is paid, the tenant—being the party in possession rather than the property owner—has strong protections against interference, which also explains the complexity surrounding squatter and possession disputes.

He emphasised that landlords still have obligations beyond respecting quiet enjoyment, including exercising reasonable due diligence when selecting tenants. Red flags may include situations where a residential unit is rented by a company, and unusually short or irregular tenancy terms.

Where utilities such as electricity and water remain under the landlord’s name, he or she may monitor usage patterns, and unusually high or irregular consumption could constitute grounds for suspicion.

Tan added that landlords are permitted to access the property for legitimate purposes, such as maintenance or servicing, provided such access is justified. However, any action taken must be grounded in reasonable suspicion, and matters involving potential criminal conduct should be referred to the authorities.

Overall, he stressed that possession rights are strong under current legal frameworks, and removing a defaulting tenant remains a legally arduous process in the absence of a comprehensive tenancy legislation.

General behavioural red flags to look out for

While most tenancies are legitimate, certain patterns of behaviour may warrant closer attention. The following indicators, while not conclusive on their own, may collectively suggest that a residential unit is being used for purposes beyond ordinary habitation.

One commonly cited warning sign is the offer of above-market rent with little or no attempt at negotiation. This may be accompanied by a large deposit paid upfront, sometimes in cash or through same-day transfers.

Rent payments that are consistently early or precisely on time, coupled with minimal or no personal interaction, have also been observed in questionable cases.

Tenants may place strong emphasis on privacy, explicitly discouraging inspections or contact. Some avoid direct engagement entirely, communicating only through intermediaries or an “assistant”. 

Frequent deliveries of parcels, boxes, or equipment, along with unusual occupancy patterns—such as lights remaining on around the clock or late-night foot traffic—can also raise concerns.

Additional indicators include refusal to allow repairs even when issues are evident, minimal furnishing despite unusually high electricity or water consumption, and a lack of personal belongings, suggesting the unit is not genuinely lived in.

Illegal call centres or scam operations

Certain rental units have been repurposed as illegal call centres or scam operations. In such cases, brief sightings of numerous mobile phones, routers, extension cords, or networking equipment have been reported. These tenants may request multiple broadband lines or demonstrate exceptionally heavy internet usage.

Physical modifications or behavioural patterns may include permanently drawn curtains, sealed windows, and a strong insistence on installing additional power points or cabling. Occupancy may involve multiple young individuals rotating in and out of the unit, often speaking in foreign accents. Neighbours have also reported constant talking, rehearsed scripts, or the use of headsets at all hours.

Drug processing or storage activities

Units used for drug-related activities may present distinct environmental signs. These include strong chemical odours such as solvents, ammonia, or acetone, as well as windows that are blacked out or fully covered. Continuous air-conditioning use, unusual ventilation arrangements, or requests to alter sinks, drains, or exhaust fans may also be present.

Waste disposal patterns can be another indicator, including garbage bags containing unusual residue or materials resembling laboratory waste. In some instances, tenants have cited vague explanations such as “e-commerce” or “research” activities without supporting documentation.

Money mule or logistics hub operations

Some residential units have reportedly been used as logistical nodes for illicit financial activities. These cases may involve constant parcel movement, utilities or broadband services registered under multiple bank account names, or tenants who never personally access the mailbox.

Other warning signs include the unit’s address being used as a registered location for multiple entities, resistance to inspection clauses in tenancy agreements, or unauthorised subletting resulting in unknown occupants.

Sharp spikes in utility usage beyond typical residential levels, evasive or threatening behaviour when questioned, and unauthorised alterations—such as extra wiring or locked rooms—have also been observed.

A pattern-based assessment

Observers caution that many individuals engaged in illegal activities deliberately mask themselves behind the appearance of “perfect” or low-maintenance tenants to avoid scrutiny.

As such, any one indicator should not be viewed in isolation or as definitive proof of wrongdoing. However, a combination of multiple red flags may justify further attention within the bounds of tenancy agreements and applicable laws.

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