How Short-Stay Homes Could Be Regulated In Malaysia

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There is no specific law passed yet in Malaysia when it comes to the regulation of short-term accommodation (STA) listed on home sharing platforms such as Airbnb, VRBO, Booking.com, HostAStay and MyCribBooking.com.

However, the Malaysia Productivity Corporation (MPC) had conducted extensive research to suggest a regulatory framework. It will submit a proposal to the Government by the end this month.

The MPC had been an important facilitator between key stakeholders since July last year.

MPC senior manager (smart regulation unit, productivity and competitiveness development) Mohammed Alamin Rehan said many discussions were held with government agencies, hospitality associations and STA operators to come up with a win-win situation for all.

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However, he conceded that regulating the home-sharing industry is a complicated issue.

“Every country is struggling with it. There is no clear jurisdiction because it is a new disruptive industry, but at the same time, we want to unlock its potential.

“We can’t block the growth of short-stay accommodations because it does support the tourism economy. But we have to ensure it doesn’t compromise on matters such as safety, security and negative externalities,” he said.

In Malaysia, STA falls under the purview of the Housing and Local Government Ministry and Tourism, Arts and Culture Ministry. But in the absence of a specific Federal law, it is currently dealt differently by local governments in individual states.

Source: MPC

The Penang Island City Council (MBPP), for example, had issued summonses against owners of short-stay accommodations while the Kota Kinabalu City Hall presently deem Airbnb illegal. Meanwhile the Kuala Lumpur City Hall requires short-term homes to be registered on its website.

As of now, MPC has identified a few holistic solutions to regulate STA on the Federal level and will propose them to the Government in an upcoming report.

These include registering with relevant authorities, seeking approval from the Joint Management Body (JMB) or Management Committee (MC) in strata properties, limiting the rentable days per year and a revision of existing laws.

Mohammed Alamin said the recommendations were meant to address pertinent issues raised by various stakeholders. At the same time, there is a need to define STA operators.

He explained that there are currently two types of STA operators – individual and commercial. MPC is proposing for a different tax regime and fee structure between individual and commercial operators.

This will even out competition for budget hotel operators and curb potential loss from unregistered operators.

In regards to operations in strata buildings, MPC’s data revealed that the bulk of STAs are serviced condominiums (51%). These are followed by apartments (12%) and terrace homes (10%).

Approval from the JMB or MC will resolve the issue of safety and security. MPC also noted that this will address maintenance upkeep due to wear and tear from STA guests.

JMB is a body tasked with managing and maintaining common property before strata titles are issued for a stratified development area while an MC takes over these responsibilities after strata titles are issued.

There are plans to introduce an integrated platform for a seamless STA registration and data sharing too.

MPC is looking at a full roll-out of a regulatory framework by next year, pending approval from the Government.


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