When I said ask a lawyer, I mean to say refer to a lawyer and not hire or get a lawyer. Who else can give better advice? If a tenant walks out, it is the tenant who breaches the tenancy agreement - if any. And who knows what the Landlord is up to! I believe, there could be some consultancy fees involved. But, isn't ignorance even more costly? It is in my opinion, it is not worth saving consultancy fee, as it may cause you greater loss!
Nobody is asking her to walk out of her contract. Afterall, if she walks out she loses all her deposits and that would be silly. The options are quite simple. Try asking her landlord that if he cannot solve the leaking problem with the upstairs landlord then would he be willing to allow her to end the contract early and refund the deposits. Maybe if she gives him two months notice or something like that then would he return back her deposits. Alternatively stop paying the rent until the leaking is solved. Then after a couple of months if won't matter so much if she loses her rental deposits. Her own landlord must also take responsibility for sorting out the problem. And the problem could be that one landlord wants the other to pay half or something like that. We just don't know.
I am a landlord and also a Council member at several condos. I know it is a waste of time consulting a lawyer, not just the cost but the amount of time necessary to send registered letters which in most cases have little effect. Landlords basically ignore lawyers letters. Even when a Court Summons is sent which will cost about RM1,500 they simply can delay it by saying they are not available on that particular date. It is not worth the hassle especially as we are talking about compensation for damage to a carpet and trying to stop a leak.
Safety81 was unlucky to have found herself with this problem. But when the two landlords are unable to solve the problem then she could consider what I have outlined above. As you well know, a landlord has no right to ask her to leave, to cut the water or electricity, to enter her apartment without her say so, to threaten her or to prevent her from entering the apartment. The choice is hers, and I am sure it is frustrating enough trying to deal with the problem of damaged carpet and leaking ceiling.
If I was in her position and my landlord refused to solve the problem, I would probably stop paying rent and then move out after two months. I believe it futile to expect compensation for the damaged carpet. As Gravitas says one should get insurance. Home contents insurance with most insurance companies only cost about RM160 - 180 per year witha maximum coverage up to RM30,000.