Property Insight > Legal > Legislative intervention needed to regulate AIRBnB

Legislative intervention needed to regulate AIRBnB

Airbnb is an online marketplace and hospitality service, enabling people to lease or rent short-term lodging including vacation and apartment rentals, homestays, hostel beds and hotel rooms.

Interestingly, the company does not own any lodging; it is merely a broker and receives percentage service fees or commissions from both guests and hosts in conjunction with each and every  booking.

Some cities have restrictions on sub-letting for a short period of time. In addition to this, many landlords or community associations also have restrictions on short term sublets. As  a Host, you may be required to pay tax on income received via Airbnb.

Under the Hotels (Federal Territory of Kuala Lumpur) Act 2003, the term “hotel”  for a licence is required which applies to any premise whereby:-

Persons are harboured or lodged for hire or reward of any kind; and

Rooms are furnished by the owner, lessee, principal tenant, occupier or Manager of such premises for the domestic use of the persons so harboured or lodged, but does not include any premise let out on a landlord and tenant basis;

A person who contravenes this Act commits an offence and shall upon conviction, be liable to a fine not exceeding RM100,000 or to imprisonment for a term not exceeding five years, or both. And, in the case of a continuing offence, shall in addition, be liable to a fine not exceeding RM1,000 for each day the offence continues to be committed

INNKEEPERS ACT 1952

“Inn” under this Act is defined to mean any hotel, boarding house or other place where any person is harboured or lodged for any kind of reasons whatsoever. This can be for hire or reward and where any domestic service whatsoever is rendered by the owner, lessee, principal tenant, occupier or Manager to the person so harboured or lodged, licensed under any written law for the time being in force in Peninsular Malaysia.

Registration of Guests Act 1965 (Revised 1989)

Under this Act, any premises, whether furnished or unfurnished,  where lodging or sleeping accommodation is provided for as a reward has to keep a specified register of guests. If the owner fails to do so, he or she shall be guilty of an offence and upon conviction, shall be liable to imprisonment for a term not exceeding one year or a fine not exceeding RM2,000 or both.

Insurance

The premises may have insurance in relation to residential habitation only. Insurance companies are not fond of liars or people who conveniently forget to tell them that they are running a small hotel. Public liability and fire insurance requirements vary for different types of occupiers.

(Town and Country Planning Act 1972 and Uniform Building By Laws 1984)

A residential premise will state it is so in the planning approvals and the Bomba requirement for a hotel type of accommodation is different from that of a residential premise. In the event of a fire, a stranger will have no clue as to where the escape routes are. The death of a visitor could perhaps lead to manslaughter charges.

Strata Management(Maintenance and Management) Regulations 2015 Third Schedule

By-Law 9 clearly  prohibits a proprietor from using his parcel for any purpose, illegal or otherwise, which may be injurious to the reputation of the development area.

As any contracting out is prohibited (Section 148/149 of SMA 2013) for any use of a parcel for illegal purposes like Airbnb as such, action may be frowned upon and may result in action taken by the Joint Management Body (JMB) or Management Corporation (MC) as the case maybe.

In my view, for all these legal concerns, there is an urgent need for legislative intervention to legalise and promote this stay as has been done for e-Hailing service providers.

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