Legally questionable: A potential customer scrolling through a website featuring Airbnb units available for rent. HBA is of the view that no Airbnb or STRA should be allowed in residential properties. — YAP CHEE HONG/The Star
Be cautious when renting out your properties for short-term stays, say experts
PETALING JAYA: Letting out units as short-term rental accommodations (STRA) in properties with strata titles such as condominiums and apartments in Malaysia is mostly a case of “breaking the law until one is caught”, say housing law experts.
Lawyer and the secretary-general of the National House Buyers Association (HBA) Datuk Chang Kim Loong said a Federal Court judgment in 2020 had ruled that management corporation bodies of residential strata buildings, through their own house rules, can prohibit short-term rental of residential units in their buildings.
However, for those properties with commercial titles, they can let them out for STRA provided a majority of the owners agree to do so by vote in a management body annual general meeting.
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In the 2020 case, involving Verve Suites Mont Kiara Management Corporation, a three-member bench, chaired by Chief Justice Tengku Maimun Tuan Mat, ruled that even if the state authority permitted the use of the land for commercial purposes, such use was still subject to other laws in force such as the Strata Management Act 2013.
Verve Suites Mont Kiara Management Corporations had passed a by-law to stop short-term rentals because residents complained that guests in such arrangements were a nuisance and a breach of its by-laws.
This resulted in Verve Suites filing a suit in the High Court in 2018 against Innab Salil, Innab Trade Sdn Bhd, Ng Gaik Kian and Tan Why Chuan.
Earlier, the Commissioner of Buildings Kuala Lumpur had issued a circular instructing all joint management bodies to curb the use of buildings in and around the city for short-term rentals.
Following the circular, Verve Suites Mont Kiara held an extraordinary general meeting, proposing to enact “House Rule No. 3,” which essentially prohibited the use of apartments for short-term rentals.
Housing law expert Wong Hua Siong from the Law Faculty of the Multimedia University said that under the current Strata Management Act (SMA) 2013, the law cannot generally stop owners from letting out their properties with strata titles as STRA on Airbnb and such platforms.
However, Wong said that the Local Government Development Minister can evoke by-laws once guests at such STRA start disturbing the community (neighbours) and there are complaints.
STRA has become a common form of lodging and accommodation all over the world for tourists and travellers. In Malaysia, in the past two decades, many owners of condominiums and apartments have started to let out their units for STRA by advertising them on various platforms.
However, in recent years, with more complaints about “guests from hell” in STRA properties, the Sabah and Penang state governments have taken it upon themselves to impose restrictions on STRA.
European countries such as Italy, France, Germany, Netherlands, Portugal and Spain have also started to tighten their restrictions on STRA, while Singapore and Sydney have imposed minimum rental periods for STRA.
“Currently, in Malaysia, only when those guests in STRA cause chaos or threaten (the peace), then the by-laws are enacted by the management bodies of the buildings. Otherwise, they are allowed to operate with not much problem.
“This is unlike that of Singapore, which has very strict provisions of STRA with a very close watch by the management committee of buildings, especially residential buildings,” said Wong.
He added that in 2018, a survey done on 40 strata-titled homeowners showed that 97.5% of them had no idea that they had to comply to regulations to let out their units as STRA.
“In the grant of title of a property, for example a house or apartment, the category of usage for these dwellings have been clearly stated, namely for residential use only,” said Wong.
HBA’s Chang said that it is important for house buyers of stratified property to get proper legal advice before investing in a property, to ensure that they do not end up being unhappy staying next to STRA in their strata-titled properties.
“You are buying a property worth hundreds of thousands of ringgit. Do not rely on the lawyers appointed by the developers. Get a good lawyer of your own.
“HBA is of the view that no Airbnb or STRA should be allowed in residential properties. Developers tend to blind buyers with gimmicks with mixed properties on commercial land. House buyers should be careful as rent on commercial land is also higher,” said Chang.
