Malaysia’s Blanket Ban on Short-Term Rentals: What are the odds?

The recent talk of blanket ban on short stay/short-term rentals in strata properties have created a heated discussion among professionals in the hospitality, tourism, and property sector. This issue stemmed from the news where a landmark court in Penang ruled that the management of strata properties have the right to ban short-term rentals in their premises.

Malaysia Short-Term Rentals Blanket Ban

Some argued that blanket ban is a solution to the unregulated industry. But, how true is this claim? In this article, we will explore on the concept of blanket ban, the possibilities for this implementation, and the concrete steps moving forward to get your questions answered.

What is a Blanket Ban?

No. It is not a ban on your blankets. According to Longman Dictionary of Contemporary English, a Blanket Ban is

a statement, rule etc. that affects everyone or includes all possible cases

In other words, it is a total ban on something which in the current a case complete ban on all short stay rental activities.

When the short stay blanket ban kicks in nationwide in Malaysia on all strata properties, those operating their short stay rentals in a strata property will need to:

  • Cease all existing short stay operations within a stipulated notice period
  • Abide to the laws or face legal punishment

Blanket Ban Ruling: What are the odds?

A blanket ban seems possible. But, the opportunity for this to happen is relatively low. With a blanket ban, no single individual or company will be allowed to take part in any short stay operations and business activities within a strata building. It is all down to zero exception.

The Airbnb market itself plays a significant role in Malaysia’s economic ecosystem. A population of Malaysians rely on the short stay industry sector to make living ends. In 2019 alone, “The Economic Impact of Airbnb in Malaysia” report revealed that Malaysia’s Airbnb guests spent RM 4.4 billion (USD 1.1 billion) in total and supported over 52,000 local jobs. (Research from Oxford Economics, 2019).

Mich Goh, Head of Public Policy, Southeast Asia, Airbnb said, “The Malaysians who live in strata buildings rely on short-term rentals to earn extra income to pay the bills.”

Malaysians Could Struggle to Pay Bills

“With economic recovery more important than ever, the key test for any policy must be – does it help grow the economy and create jobs for Malaysians? On that test, any proposal to ban short-term rentals in strata buildings fails. Blanket bans would have a devastating impact on the already weakened tourism industry. They threaten thousands of local jobs and the supplemental income that so many regular Malaysians rely on during these crucial times” she added.

Short stays have indeed facilitated tremendously in the growth of other sub-industry sectors. – cleaning, food and beverage, and transportation, just to name a few. A blanket ban on it would seem impossible for it could impale the economy of the country negatively.

“We are strongly opposed to any unfair and heavy-handed blanket ban on short-term rentals in strata buildings,” said Airbnb’s Southeast Asia head of public policy Mich Goh.

As one of the key industry stakeholders, HostAStay stands in support of Airbnb’s opinion in opposing blanket ban on short stays. We trust that by imposing stricter SOP’s and guidelines instead of a blanket ban would be a wiser approach to the issue on hand.

Regulation is Inevitable

While it is true that short-term rentals have opened up doors of opportunity to people – regulation is important to create a level playing field and to ensure the safety of all parties involved.

In an open letter to New Straits Times, homeowner, Victor Tan said, “I strongly believe that we cannot take a step back and ban short-term rentals altogether, as it provides greater choice for travelers. We should be creating an equal playing field so that the Malaysian tourism industry can recover and thrive once again.”

Short Stay Blanket Ban Impact on Malaysia's Economy

The regulation of this industry is a matter that needs to be addressed critically. According to Free Malaysia Today (FMT), Uzaidi Udanis, president of the Malaysian Inbound Tourism Association, told them that every government will have to face the reality in finding ways to manage the impact of Airbnb operations.

“Guidelines are being drawn up for management bodies of apartments and condominiums to enforce the ban on homestays or short-term rentals through their house rules.” (FMT, 2020)

While such guidelines are provided, it is important to note that the ban enforcement will be entirely up to the buildings’ management decision.

What Can You Do?

1. Study the proposed STRA regulation

Since in early 2020 this year, we have been following closely with the proposed STRA guideline which is the benchmark for the implementation of the short stay regulation. Some of the issues addressed in the guideline were to prevent noise & public nuisance, provide transparency, and to protect consumers.

The proposed guideline clearly shows the government’s initiative in tackling the major key concerns raised by the public. Have a quick read on the guideline’s summary here.

2. Understand your rights

If you own a commercial property, on default you are allowed to carry out short stay operation activities for your unit. In the event where the building manager of your apartment or building bans such operation, you must cease all operations. Failure to adhere to the rules set by your building manager may result in legal actions.

For residential properties, you will need the approval from the local authority to run your short stay business. Once approved by the local authority, you will need the support of your building’s manager.

Building Manager

3. Acknowledge building manager rights

The Joint Management Body (JMB) or Management Council (MC) is endowed the authority to make the final decision for activities within a strata property (high-rise properties which are typically gated & guarded). They play an important role to control, manage and administer the use and enjoyment of the property.

Owners/Investors for such properties will need a consent letter from the building’s JMB/MC to operate their short-term rental business. Additionally, they would need to comply with the rules set by the JMB.

4. Prevent blanket ban – Support our mission in regulating the industry

We can all be the changemaker in this industry. Let us know if your building has been banned from short-term rentals or you are still allowed to carry out your operations as usual. Share us your key concerns & we’ll see how we can work together to create a cohesive short stay ecosystem for everyone – homeowners, hosts, residences, guests, basically; everyone!

CONCLUSION: Our Take on the Blanket Ban

A blanket ban on short-term rentals for strata properties in Malaysia would curb the surface problem in the beginning. In the long run, it could potentially bring more harm than good. The key impact would definitely be on the economy aspect of the country. With the already weakened tourism industry, it could dampen the living means for a great number of individuals.

Past data and statistics have shown that short-term rentals have contributed a huge portion of income to the nation. Given the current situation, a total ban could result in a slower economy recovery.

As the government had took the first step in developing a regulation guideline, it is critical to see how we could all move forward along with it to reduce the implications of short-term rentals towards the safety & security of the community.

HostAStay is in support towards regulating the short stay industry and the government should have a one-stop licensing platform to ease the registration process, generate a unified visibility of information on a single dashboard, and smoothen the reporting procedure.

You have reached the end of the article! We hope you gained key takeaways from our article. Don’t forget to support our mission in regulating the industry. We would love to hear from you!

Read more:
InvestmentAirbnb Management

 

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *