Airbnb considered legal
The Government has endorsed home-sharing service Airbnb, saying it is legal as long as there is no foul play.
The Urban Wellbeing, Housing and Local Government Ministry said this in response to claims from the hotel industry that such services were illegal as homeowners were renting out properties to tourists for business.
“Due to the nature of travellers drawn to cheap prices and the personal agreement made between the host and the traveller, Airbnb is considered legal.
“This is as long as no foul play or fraud is involved or intended, such as in cases of Internet scams,” the ministry’s policy and inspectorate division told Sunday Star.
While there have been complaints from hotels on the emergence of home-sharing platforms, such issues have been discussed by various government agencies including the ministry, Tourism and Culture Ministry, the Malaysia Productivity Corporation and police.
For now, both ministries have no plans to draft any new law on the matter. There are also currently no plans to issue any licences, like those granted to hotels, for Airbnb hosts.
“The Urban Wellbeing, Housing and Local Government Ministry has no authority to block Airbnb or to allow it to operate “The transaction and agreement made between the host and the traveller is done online,” said the ministry.
On disturbances caused by Airbnb guests to other residents in the property, the ministry said such matters should be settled between the Airbnb host and the neighbours involved.
“However, if foul play is suspected, neighbours should lodge a report with the relevant authorities including the police, Domestic Trade, Cooperatives and Consumerism Ministry, Malaysian Communications and Multimedia Commission and Department of Islamic Affairs,” it said.
It was reported that the local hotel industry claimed home-sharing services like Airbnb were eating into their business with some estimating about 5% to 15% of their business being diverted.
Hoteliers also alleged that consumers were not fully protected under such arrangements.
Source: TheStar.com.my
If you want to operate a homestay in a condo, remember to clean up and be nice to your neighbours. They can cause a big dent to your pockets by reporting you to the Inland Revenue.
All Airbnb hosts do not report this extra income to Lembaga Hasil. Quite easy to get rid of them with tax evasion.
Airbnb is endorsed but not approved. It’s not a personal agreement when it involves Airbnb & homestay operator & host. Further more you need a licence to operate a homestay. Secondly, who is responsible for if facilities damages were done by guests from homestay ?
@James
What the article implied is that the gov is not going to make Airbnb illegal, but that does not mean that Airbnb can be done freely.
Example, when the house rules of a condo says you can’t keep a dog in your condo unit, it is illegal to keep a dog. But that does not mean that you need the ministry to declare a blanket ban on all pet dogs in condo.
In short, if most residents feel that short-term rental brings more harm than good in any particular condo, you can always incorporate the ban in your house rules, therefore making it illegal for that condo to have short-term rentals. So don’t fret my friend, there are ways to stop the nuisance of short-term rentals.
@ jenny
Anything business conducted without a licence is illegal.
All developers are culprits in this. They give the impression that homestay is fine and leave it to the JMB to impose the rules and be the bad guys.
The article of law that defines tenancy is in our National Land Code that states it as 3 yrs and below, it could be for 1 yr, 1 month, 1 week or any duration agreed upon between the landlord and tenant. The nature of usage must be related to the lawful occupant. For example, if the landlord tenants out his apartment for 3 days, the lawful occupant is now the tenant. If he resides in it himself, then it is residential usage.
If he operates a retail shop, office, lodging etc then it is commercial usage. It is a myth to relate making money under short term tenancy by the landlord as commercial or operating a business in the property. The landlord business is rental, the usage of the property is by the lawful occupant.
One more thing, Management, JMC/JMB has no authority to implement any house rules that interferes with the parcels right to rent unless it was already in the SPA.
Hi Vic,
Thank you for sharing your concerns regarding the issues with short term rentals. The authorities are in the process of revising our laws to define short term rentals as anything below a duration of 6 months. Residential tenants are defined by a rental lease of only more than 6 months. This will be in line with common rules in our neighbouring country, Singapore, which makes short term rentals illegal for residential properties (both private or HDB).
SPA does not dictate rules and regulations within a stratafied property, but a supplementary agreement of house rules does. House rules can be modified as long as agreeable by majority owners through a vote in an EGM/AGM once JMC/JMB is formed.
Even before an official modification of house rules, management can make things difficult for short term rentals by deliberately causing “technical problem” for access cards, water supply etc, resulting in a nightmarish stay for your customers.
Hi Rachel
Glad to see this forum is still of interest. When you say our authority are revising our Tenancy Law, which authority are you referring to?
This is important because it shows there is no existing law that prohibits the duration of tenancy. We should also take note, people buy properties for different reasons. There is residential vs commercial zoning, private condo vs service apartment etc. Hopefully the authorities can regulate and make things clear so the public will know which property to invest in.
I agree with Vic… being drafted does not mean that it is law. Rachel… it has been 1 year and I still see no “law” as mentioned by you.
Also, MCs cannot “cause problems” for owners… they are lucky that maybe no owner takes them to court if not they better pray that got their law right otherwise they will be coughing out some big money.
“From a legal point of view, short-term rental means operating an illegal lodging house without a lodging house licence issued by the local authority. Landlords or property owners who ignore notices from us for them to cease their unlicensed short-term rental activity will be issued summonses,” said a spokesman from the Environmental Health and Licensing Department.
He explained that the property owners violated two laws, namely the Town and Country Planning Act of 1976, and the Trades, Businesses and Industries By-Laws of 1991 by Municipal Council of Penang Island.
The properties appropriate for short-term stays are hotels, lodging house and serviced apartments, as their Certification of Completion and Compliance clearly expresses their usage, noted the spokesperson.
Hence, he advises landlords to verify the allowed uses for their properties in Penang from the local Planning Department before they engage in short-term rental.
I wonder if you have a neighbor that rented out to a barbarian for 2 years will make you happier compare to for 2 days? my point is, one will never know how a person will behave in your neighborhood whether it’s for short or long term, as long as the house owner takes responsibility of the damages ( if there is any), then Airbnb or similar short term rental is ok
There must be tenancy agreement between the tenants and the landlord to be considered as legally tenanted. In the case of Airbnb, there is no legal agreement (signed and stamped) between tenants and landlord. Thus, it should not be considered legally tenanted. Airbnb can only be legal from the standpoint of letting your friends or family members to stay for free.
@Penang Lang
no legal agreement doesn’t mean it’s illegal, and the article above tried to explain.
Few more months spent on the subject has led me to understand that a JMB / MC needs to enact bylaws that restrict short-term rental and this will need passing of a special resolution to be effective (i.e. more than 75% votes). Also, such bylaws may be challenged based on the Strata Management Act 2013 in the courts.
Yes… JMBs and MCs can do as they like. Any citizen can do as they like… e.g. steal / fight. Just make sure no one sues you for it. coz likelihood of loosing is high.
@CopyCash
How the Majlis works is that the officer can cry mother cry father on the law that is broken but ultimately they will have to submit to their legal department for enforcement. They can issue the summons through like using tissue paper but does not mean if a person challenges the courts will uphold it. This is the system of the rule of law (fortunately). The ministers or officers are NOT the law…
…and the clear answer is?
Penang is clear.
https://www.thestar.com.my/news/nation/2018/03/31/doors-shut-on-home-share-venture-operator-loses-claim-against-condo-jmb-for-not-letting-him-run-busi/
The JMB is a body enacted by Strata Management Act, a federal law and has duty to comply with federal, state, city council and house by-laws. Given that the Penang City Council laws deem such activities as illegal and most house by-laws include a section that prohibit illegal activities, the JMBs in Penang can evict those short term stay guests including making police reports against them as trespassers.
To be fair for the short term stay hosts, they should take up the case against Penang City Council if they think city council laws have been applied to them wrongly. If the court rules in favour of them, then they still need to overcome the house by-laws that specifically prohibit such activities.
@Vic
Vic, you are right that a special resolution is required to pass by-laws against short term stays. However I have been hearing two figures, two third and 75% so need to find out myself which is right. For Penang, we are helped by the city council laws which enforcement officers have used against short term stays.
However we are also pressing ahead with new by-laws in upcoming AGM where we are introducing fine of RM 200 per person per day. The SMA mentions maximum fine of RM 200 per event and we have received lawyer opinion that we can proceed to interpret per person per day as an event! So if five guests, the management can fine the host RM 1,000!
Also we included same fine of RM 200 per person against the owners for guests’ improper attires at swimming pool. This is always our issue that those guests go into our swimming pool fully clothed!
Clamping policy and cancellation of access cards and RM 200 to open clamp and RM 200 to reactivate access cards for those caught doing short term stays.
@JMB
You really have my respect, great job you guys doing there!! Is it convenient to tell which JMB you’re from? I will seriously consider buying a property there for peace of mind.
Not all condos disallow…
Nowadays a lot of investors just want to earn as much money regardless moral and ethic. They can do home stay business in commercial title apartments or service apartments but not private residential title apartment. More and more condo/apartments in penang (I believe in KL selangor too) pasted notice in lift and banner in guard house regarding “HOME STAY IS NOT ALLOW”. This is because come with reasons, in fact home stay can bring a lot of issues to residents such as security issues, misuse of facilities, homestay guest making noisy at night etc.
Furthermore, assessment tax, electrical and water bills are more cheaper for residents title instead of commercial because residents title means for a shelter for human to stay and not the places for some greedy to make business. Nothing wrong to do investment but at least do it with ethic, pls no invest LMC, affordable houses and doing home stay business.
@ck123
Agree. We have posted at least twice that short term stay is illegal but those owners just don’t care. As mentioned above, Penang is the only state where MBPP has taken actions based on local city council laws. This effectively gave us strong legal background to act against the short term stay activities. For other states, I understand that the JMBs must pass the resolution and/or by-laws to prohibit such activities before taking any action to avoid legal complications.
One of our committee members visited MBPP and the COB in MBPP has limited resources (about 15 staff overlooking hundreds of JMBs within Penang Island itself!!!). They openly said there is insufficient resources to perform required enforcement.
Their advice is to get the property management company to compile all the short term stay activities:- download the host profiles, property profiles including all the pictures. Give those information to them and they will issue fine as well as asking BOMBA to issue further fine for violating fire safety regulation. If the hosts/owners being stubborn, they will take them to court which will include potential jail time.
@SiuMei
SiuMei, exercise your rights, get your current JMB to read
https://www.thestar.com.my/news/nation/2018/03/31/doors-shut-on-home-share-venture-operator-loses-claim-against-condo-jmb-for-not-letting-him-run-busi/
This has set the precedent unless the host/owner in that case gets a court injunction against the ruling.
If the JMB committee doesn’t take any action, complain to the COB about their inactions. The JMB members have a fiduciary duty to carry out their duties under the federal act. Any committee not able to carry out these duties should not be elected again.
It also partly the problem of your property management company. Remind them their first priority is to ensure all laws being followed. Expel them if they are unwilling to be clear on their priority. Get them to download all host profiles and host properties including all pictures. Get them to file official complaints to COB so enforcement can be carried out.
Yup
Same goes to my property in Bayan Lepas. The JMB members and concern owners are trying their best against the Homestay Owners and Agents.
Don’t fight the wrong enemy, one day, you may Airbnb too
@Tarzen
If the rules and regulations are implemented by the local authorities. This issue might be able resolved peacefully indeed.
I doubt they will regulate clearly, so continue this crazy debate. May not be a bad thing too
@JMB2
If I’m not mistaken..it being stated in S&P agreement that the residential apartment can not be use as home stay. Correct me if I’m wrong..
@Tarzen
Yes, true as well.
@jacky
did it say in the s&p what is the penalty for not following it?
Just to clear up last few comments.
1. Ignore S&P – this is the contract between developer and buyers. There is nothing relevant to home stay issue in S&P.
2. During signing of S&P, there could be another document signed by purchasers (Deed of Mutual Covenants which covers items 3 & 4 below). This is the document that is relevant.
3. The third schedule of Strata Management Act (SMA) specifies various “by-laws” to follow (no argument here unless you want to file a court case against this federal law).
4. SMA allows “additional by-laws” to be made and to be approved during meeting.
5. SMA allows maximum fine of RM 200 per offence but you must specify this in your additional by-laws (the type of offence and the fine).
6. JMB is a body enacted by SMA and has duty to follow all relevant laws (federal, state, city council, by-laws and additional by-laws).
7. The by-laws and additional by-laws would have a clause stating clearly no illegal activities.
8. MBPP has used two city council laws to deem short term stay as illegal. This has been reinforced by a ruling against an owner who took the JMB to the Tribunal for prohibit him from running short term stay.
9. With items 7 and 8, all JMBs (at least in Penang) have no fear to declare short term stay as illegal and can make police report against those owners, hosts and short term stay guests. We filed police report against owners and hosts and evicted all short term stay guests as trespassers in our police report.
10. Not a single short term stay guest for past 4 weeks in our property! We continue to monitor websites and those properties that have been doing homestay in the past.
11. COB has insufficient resources to carry out enforcement. They will take action only when the required information is supplied to them.
12. Approach your JMB committee and press them to get the property management company to (a) create a list of all current online ads relating to your property (b) download the host profile, property profile and all pictures for each online ads (c) submit to COB in MBPP.
13. We did (a) and (b), wrote to all those hosts and owners (total 25 listings) to remove them within 72 hours else we will make police report and submit to COB in MBPP. At the end, all removed except for two listings which we promptly submitted to COB.
14. Introduce RM 200 fine per person per day if short term activities into your house by-laws. If 5 person enters, we charge RM 1,000 each day. This is just one offence, we have lots more fineable events
@JMB
Thank you very much for sharing this info. Thumbs up
@JMB
Very good info sharing. Two thumbs up!
Which condo are you from if you don’t mind sharing?
Wish my condo has JMB like you
@JMB
means JMB has overriding say over any signed documents during sales.
JMB has to get majority votes to implement laws, so fair enough. if the majority of the condo decides against homestay then the tribe has spoken but until then…
@jmb3
I think a “residential title” in itself implies that the purpose of the property concerned is for long term residential purposes, and not for commercial purposes like a hotel, whether Airbnb prohibition has been explicitly spelled out in any pre-existing additional by-laws for a particular condo or not. So your ” if the majority of the condo decides against homestay then the tribe has spoken but until then……” won’t work. Sorry.
It’s still illegal, and if anyone tries to challenge that in court, I’m afraid the case will get “thrown out” again, and this time, the judge will throw the file straight into your face. Ouch. Cheers!!
Airbnb is just a platform, homestay is an action. Homestay still illegal for residensial area, everyone can log report to MPPP then they will fine the onwer.
Better good homestay than atrocious owners, I would say
@Spooky
Good homestay means legally conducted at approved locations like serviced apartments.
I would say:-
Better good and respectful residents/tenants than atrocious owners who care less about the rights of other residents/tenants by running illegal homestay! As ck123 mentioned above, moral and ethic not in their vocabulary!
Obviously our national principles or Rukun Negara mean nothing to them:-
KEPERCAYAAN KEPADA TUHAN
KESETIAAN KEPADA RAJA DAN NEGARA
KELUHURAN PERLEMBAGAAN
KEDAULATAN UNDANG-UNDANG
KESOPANAN DAN KESUSILAAN
Service Apartment is just a name only. It is still an apartment with provide some service.
Some may even just like residential apartment.
When JMB band it at EGM, it will just band.
It is still up to JMB decision in the EGM.
Remember, Service Apartment does not mean a right place to fo AirBnB freely.