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> Mix Development and Short Term Rental, daily rental

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aurora97
post Jun 19 2015, 09:45 AM

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QUOTE(puchongite @ Jun 19 2015, 09:44 AM)
I don't think by law you are allowed to run a business in your serviced apartment for long term stay. Even though it sits on a commercial land and commercial title.

Enforcement is a different issue.
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interesting... topic... let me go take my shovel and korek.

thanks!
cherroy
post Jun 19 2015, 09:51 AM

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QUOTE(NikAriff @ Jun 19 2015, 09:07 AM)
Yes you can ask your JMB/JMC to call for a AGM/EGM and get all owners consent to agree to implement a rules to stop the short term rental, but you need refer to your SPA, if you SPA is do not contain Schedule H then there is an issue it mean is not residential, some Mix Development that come with hotel do have rules in the SPA that owners cannot do Short Term Rental and that is difference cases, if your SPA do not have such rule and by implementing a rule to stop the STR by law is illegal it self and if the owners want to SUE the JMB they will have sufficient evidence to bring them to court, in this case the committee are still able to make new rules but they have to get the consent of all the unit owners mean if you have 500 unit you need to have 500 signature to agree and implement it to prevent legal action from owners that run STR.
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STR has plenty of grey area start with, that's why it is problematic.

I don't think MC is allowed to set a by law that violate basic right of ownership.
How can MC set a by law rules that restrict owner who to rent, how the property being leased etc?

If a by law can be set like that, next time, MC also can convene an AGM, get all the signature then set a by law stated cannot rent to student, cannot rent for 1 month or 3 months, etc.
It doesn't make sense.

There no rule allowed in the Strata title act saying, if you getall the signature from all the owner, then you can apply such such kind of restriction.
The act only empower MC to set by law or house rules, but definitely not on restriction within individual unit how it is being used.

Until there is strata act that clearly stated STR is prohibited by stated the definition of STR, it is in grey area, which is difficult to tackle.
Previously there was case on STR, council only can fine the owner on the basic of running commercial activities in residential property, as there is no proper law or act to define STR and prohibit it, that's the major problem.

As such a restriction only can be imposed within local council, COB, or within the strata act itself.

MC only can govern on the issue on house rules on common property, access to the property, while within the unit itself, MC doesn't have juridication how the unit being leased.
Just like MC cannot enter the individual premise to restrict how the renovation (inside) being done, except the issue has caused nuisance or damage to common property.

Correct me if I am wrong.

This post has been edited by cherroy: Jun 19 2015, 09:52 AM
puchongite
post Jun 19 2015, 09:56 AM

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QUOTE(NikAriff @ Jun 19 2015, 09:45 AM)
Hi Good Day,

In which part of the document does it states out that short term stay or daily use is commercial use?

I agree with you that mostly the management office will disallow owner to run short term stay but also to add in that this will need to look into their residents handbook and SPA as well, because if is in the house rules then calling for a AGM/EGM for majority vote can change or add rules to control, but if is the rules implement by the AGM/EGM are against the rights of SPA then we might have a problem, to my understanding SPA for residential falls under schedule H and SPA for Mix Development do not falls under this we might need to clarify this with the Authority but as usual the authority is inefficient.  doh.gif

Regards
Nik
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http://www.customs.gov.my/en/pg/pg_ig/Acco...uly%202014).pdf

Point 10© and others.


cherroy
post Jun 19 2015, 09:58 AM

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QUOTE(puchongite @ Jun 19 2015, 09:56 AM)
Custom issue is on treatment of GST, not related to Strata management act issue. smile.gif

2 difference front.


xl2778
post Jun 19 2015, 10:05 AM

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I have seen below clause in Deed of Mutual Covenant, does it mean short term stay is allow

The Vendor hereby fully reserves it absolute right and liberty, as it sole discretion, to use and or convert the SOHO, wholly or partially, into a hotel, guest house, hostel or inns regardless of whether the vendor shall operate the hotel on its own or through another or through an outright sales of the SOHO, wholly or partially , to another for this purpose.

The purchaser agrees and accepts that it is the vendor sole and unquestionable right, privilege and liberty to use and convert the SOHO, wholly or partially into a guest house, hostels or inns or any commercial entity at its sole discretion.
nookie188
post Jun 19 2015, 10:06 AM

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QUOTE(cherroy @ Jun 19 2015, 09:51 AM)
STR has plenty of grey area start with, that's why it is problematic.

I don't think MC is allowed to set a by law that violate basic right of ownership.
How can MC set a by law rules that restrict owner who to rent, how the property being leased etc?

If a by law can be set like that, next time, MC also can convene an AGM, get all the signature then set a by law stated cannot rent to student, cannot rent for 1 month or 3 months, etc.
It doesn't make sense.

There no rule allowed in the Strata title act saying, if you getall the signature from all the owner, then you can apply such such kind of restriction.
The act only empower MC to set by law or house rules, but definitely not on restriction within individual unit how it is being used.

Until there is strata act that clearly stated STR is prohibited by stated the definition of STR, it is in grey area, which is difficult to tackle.
Previously there was case on STR, council only can fine the owner on the basic of running commercial activities in residential property, as there is no proper law or act to define STR and prohibit it, that's the major problem.

As such a restriction only can be imposed within local council, COB, or within the strata act itself.

MC only can govern on the issue on house rules on common property, access to the property, while within the unit itself, MC doesn't have juridication how the unit being leased.
Just like MC cannot enter the individual premise to restrict how the renovation (inside) being done, except the issue has caused nuisance or damage to common property.

Correct me if I am wrong.
*
Well, I do know that the MBPJ has a restriction on number of occupants in a property ..
I think in a condo, the JMC /MC can amend the DMC to regulate number of occupants allowed per sq foot or whatever
due to safety reasons and most importantly the impact on the fire insurance coverage for the building. As we know, when fire occurs in a crowded places or areas - it becomes potentially fatal .

As for the unit itself, its not entirely true the JMC or MC has no say - after all most condos do not allow pets inside the condo..

I stand corrected if my observations are flawed..smile.gif

This post has been edited by nookie188: Jun 19 2015, 10:07 AM
NikAriff
post Jun 19 2015, 10:21 AM

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QUOTE(cherroy @ Jun 19 2015, 09:58 AM)
Custom issue is on treatment of GST, not related to Strata management act issue.   smile.gif

2 difference front.
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Hi thank for sharing I shall go through the document and will be giving you my opinion soon.

This post has been edited by NikAriff: Jun 19 2015, 10:22 AM
aurora97
post Jun 19 2015, 10:22 AM

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QUOTE(nookie188 @ Jun 19 2015, 10:06 AM)
Well, I do know that the MBPJ has a restriction on number of occupants in a property ..
I think in a condo, the JMC /MC can amend the DMC to regulate number of occupants allowed per sq foot or whatever
due to safety reasons and most importantly the impact on the fire insurance coverage for the building.  As we know, when fire occurs in a crowded places or areas - it becomes potentially fatal .

As for the unit itself, its not entirely true the JMC or MC has no say - after all most condos do not allow pets inside the condo..

I stand corrected if my observations are flawed..smile.gif
*
To add:
Difference between DMC & House Rules

» Click to show Spoiler - click again to hide... «


I think the question is firstly to address “is whether STR is legal in the first place”? Safety, fire insurance, number of occupants, pets, enforcement and so on… are only side issues. If you can show that STR is illegal (or unlawful) in the first place, you don’t even have to consider the side issues.

NikAriff
post Jun 19 2015, 10:44 AM

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QUOTE(aurora97 @ Jun 19 2015, 10:22 AM)
To add:
Difference between DMC & House Rules

» Click to show Spoiler - click again to hide... «


I think the question is firstly to address “is whether STR is legal in the first place”? Safety, fire insurance, number of occupants, pets, enforcement and so on… are only side issues. If you can show that STR is illegal (or unlawful) in the first place, you don’t even have to consider the side issues.
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Hi to my knowledge there is no law in Malaysia that differentiate STR and Long Term Rental, the only law that differentiate is anything that is below 3 years is consider Rental and Anything that is above 3 year is consider a Lease and there is no control that Rental must be at least how many days, or months or years.

If this is the law then STR is not illegal and for the tenancy agreement to stamp it or not is up to the owner and the tenant the stamping only come to play when there is a dispute arise from the rental and the case need to bring to court, but still if is not stamp the owner can stamp it later and pay a fine.

Correct me if I am wrong.

Thanks
cherroy
post Jun 19 2015, 10:45 AM

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QUOTE(nookie188 @ Jun 19 2015, 10:06 AM)
Well, I do know that the MBPJ has a restriction on number of occupants in a property ..
I think in a condo, the JMC /MC can amend the DMC to regulate number of occupants allowed per sq foot or whatever
due to safety reasons and most importantly the impact on the fire insurance coverage for the building.  As we know, when fire occurs in a crowded places or areas - it becomes potentially fatal .

As for the unit itself, its not entirely true the JMC or MC has no say - after all most condos do not allow pets inside the condo..

I stand corrected if my observations are flawed..smile.gif
*
You cannot amend DMC that had been signed.

DMC is just an agreement between developer and purchaser.

Once strata title is out, all follow Strata act, and any action only can be done based on what Strata act empower MC to do.

MC has no such power to restrict the occupant per sqft issue, only council, and any act gazetted can govern such an issue.

This post has been edited by cherroy: Jun 19 2015, 11:07 AM
aurora97
post Jun 19 2015, 10:53 AM

I Didn't get the Memo
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QUOTE(NikAriff @ Jun 19 2015, 10:44 AM)
Hi to my knowledge there is no law in Malaysia that differentiate STR and Long Term Rental, the only law that differentiate is anything that is below 3 years is consider Rental and Anything that is above 3 year is consider a Lease and there is no control that Rental must be at least how many days, or months or years.

If this is the law then STR is not illegal and for the tenancy agreement to stamp it or not is up to the owner and the tenant the stamping only come to play when there is a dispute arise from the rental and the case need to bring to court, but still if is not stamp the owner can stamp it later and pay a fine.

Correct me if I am wrong.

Thanks
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Haven’t sighted anything to the contrary, I do agree that there’s no specific definition in the law as to what constitutes STR and LTR.

As for quoting item 49 Schedule 1 of the Stamp Act 1949, it doesn’t really help your cause because the Stamp Act is a means in which the government uses to collect revenue.

I would suggest the National Land Code, a lease is recognized as term exceeding 3 years (s.221 National Land Code 1965) and is capable of registration (s.292 National Land Code 1965). A tenancy on the other hand which is for a term not exceeding 3 years is exempted from registration (s.216 National Land Code 1965).

Like Ascott and Sommerset Residence or any other hotel per se, I would class a STR is a form of License instead of a tenancy.

cherroy
post Jun 19 2015, 11:06 AM

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QUOTE(aurora97 @ Jun 19 2015, 10:53 AM)
Haven’t sighted anything to the contrary, I do agree that there’s no specific definition in the law as to what constitutes STR and LTR.

As for quoting item 49 Schedule 1 of the Stamp Act 1949, it doesn’t really help your cause because the Stamp Act is a means in which the government uses to collect revenue.

I would suggest the National Land Code, a lease is recognized as term exceeding 3 years (s.221 National Land Code 1965) and is capable of registration (s.292 National Land Code 1965). A tenancy on the other hand which is for a term not exceeding 3 years is exempted from registration (s.216 National Land Code 1965).

Like Ascott and Sommerset Residence or any other hotel per se, I would class a STR is a form of License instead of a tenancy.
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The problem is we have no proper law/act to define STR and prohibit it.

Even for Strata management issue, only now the newly Act 757 starts to address the maintenance fee defaulter issue and many tedious management issue through a tribunal.

A more comprehensive Strata Management act is still needed.

NikAriff
post Jun 19 2015, 11:16 AM

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QUOTE(aurora97 @ Jun 19 2015, 10:53 AM)
Haven’t sighted anything to the contrary, I do agree that there’s no specific definition in the law as to what constitutes STR and LTR.

As for quoting item 49 Schedule 1 of the Stamp Act 1949, it doesn’t really help your cause because the Stamp Act is a means in which the government uses to collect revenue.

I would suggest the National Land Code, a lease is recognized as term exceeding 3 years (s.221 National Land Code 1965) and is capable of registration (s.292 National Land Code 1965). A tenancy on the other hand which is for a term not exceeding 3 years is exempted from registration (s.216 National Land Code 1965).

Like Ascott and Sommerset Residence or any other hotel per se, I would class a STR is a form of License instead of a tenancy.
*
Hi to my knowledge there are 2 type of service apartment one that can be converted and run by hotelier that need license and another is run by individual owners that do not need a license but as long as the apartment is not private residential and is falls under service apartment like Regalia Resident in kuala lumpur.

aurora97
post Jun 19 2015, 11:22 AM

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QUOTE(cherroy @ Jun 19 2015, 11:06 AM)
The problem is we have no proper law/act to define STR and prohibit it.

Even for Strata management issue, only now the newly Act 757 starts to address the maintenance fee defaulter issue and many tedious management issue through a tribunal.

A more comprehensive Strata Management act is still needed.
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Not sure, hence I am taking out my shovel.

I am slanting towards the idea that the STR may be regulated by local by-laws instead of federal legislation.

The SMA governs the JMB and MC, it will not help you in this topic. Also to add, after perusing Schedule 4 of the SMA, the tribunal has no say in this issue as well.

As for a comprehensive or not SMA, i think cukup makan for now. Ask for more from Gomen now, you probably get nothing.

I have trained my thought as follows:-

1. I can establish that an “STR” is a license and not a “tenancy”.
You will know why I come to this conclusion because of the term “occupiers liability”. The rights and liability of a trespasser, visitor, licensee, tenant and lessor are all very different.

2. where STR is applied in a service apartment setting, is such “business activity” legal, unlawful or otherwise?

3. what does the law and rules say?

(a) is there a federal legislation?
(b) if there’s no federal legislation, is there any local by laws?
© if there’s no local by laws, what about DMC and house rules?

4. what is the solution or remedy?

cherroy
post Jun 19 2015, 11:31 AM

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QUOTE(aurora97 @ Jun 19 2015, 11:22 AM)
Not sure, hence I am taking out my shovel.

I am slanting towards the idea that the STR may be regulated by local by-laws instead of federal legislation.

The SMA governs the JMB and MC, it will not help you in this topic. Also to add, after perusing Schedule 4 of the SMA, the tribunal has no say in this issue as well.

As for a comprehensive or not SMA, i think cukup makan for now. Ask for more from Gomen now, you probably get nothing.

I have trained my thought as follows:-

1. I can establish that an “STR” is a license and not a “tenancy”.
You will know why I come to this conclusion because of the term “occupiers liability”. The rights and liability of a trespasser, visitor, licensee, tenant and lessor are all very different.

2. where STR is applied in a service apartment setting, is such “business activity” legal, unlawful or otherwise?

3. what does the law and rules say?

(a) is there a federal legislation?
(b) if there’s no federal legislation, is there any local by laws?
© if there’s no local by laws, what about DMC and house rules?

4. what is the solution or remedy?
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I think we can eliminate the option on DMC and house rules, as MC cannot impose restriction on owner how they want to do on their asset. It is their right unless state otherwise in any local council law or federal legislation.

House rules, only govern what you can do or not do throughout mainly on the common property issue.
eg.
Cannot park at visitor car park, impose clamp and fine on illegal parking on common property, cannot use facilities after midnight, need to pay deposit when moving in or out or renovation etc issue.

MC has the power on taking care of common property and impose house rules on it, but not the individual parcel.

aurora97
post Jun 19 2015, 11:33 AM

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QUOTE(NikAriff @ Jun 19 2015, 11:16 AM)
Hi to my knowledge there are 2 type of service apartment one that can be converted and run by hotelier that need license and another is run by individual owners that do not need a license but as long as the apartment is not private residential and is falls under service apartment like Regalia Resident in kuala lumpur.
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In addressing the TS question, I will take the second response:

Another is run by “individual owners” that do not need a license but as long as the apartment is not private residential and is falls under service apartment like Regalia Resident in Kuala Lumpur.

Unfortunately, you statement lack of credible source to support your inference.

Assuming that is the case, then the remedy would be to amend the house rules to tighten the usage of the common area. (example access card to differentiate between owners and visitors, requiring owners who carry out business to take up additional insurance [ example what if the visitor dies in the service apartment after being hit by a falling flower pot])

juicyliana
post Jun 19 2015, 11:58 AM

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i guess those landlords rented it out as home stay.
aurora97
post Jun 19 2015, 12:00 PM

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QUOTE(cherroy @ Jun 19 2015, 11:31 AM)
I think we can eliminate the option on DMC and house rules, as MC cannot impose restriction on owner how they want to do on their asset. It is their right unless state otherwise in any local council law or federal legislation.

House rules, only govern what you can do or not do throughout mainly on the common property issue.
eg.
Cannot park at visitor car park, impose clamp and fine on illegal parking on common property, cannot use facilities after midnight, need to pay deposit when moving in or out or renovation etc issue.

MC has the power on taking care of common property and impose house rules on it, but not the individual parcel.
*
I completely agree and I am not disputing the fact that DMC and House Rules have no say on this subject matter because it infringes basic human rights.

I have been highlighting from the beginning that the crux and the use of DMC and House Rules are to regulate the common areas. Unless he can somehow fly to his unit, he will need to use the common area. Gaining control of access points is key in discouraging people from carrying out business activities, on this score, one must also have support of the general population and also the management committee in order to succeed.

I further caveat my view that one should only resort to DMC and House Rules ONLY when all avenues have been exhausted (both Federal, State and Locality).

cherroy
post Jun 19 2015, 12:48 PM

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QUOTE(aurora97 @ Jun 19 2015, 12:00 PM)
I completely agree and I am not disputing the fact that DMC and House Rules have no say on this subject matter because it infringes basic human rights.

I have been highlighting from the beginning that the crux and the use of DMC and House Rules are to regulate the common areas. Unless he can somehow fly to his unit, he will need to use the common area. Gaining control of access points is key in discouraging people from carrying out business activities, on this score, one must also have support of the general population and also the management committee in order to succeed.

*
Yup, I agreed on this matter, until then, what MC can do is to impose some strict house rules which make it difficulty for STR customer to access into the property without access card, as well as use of facilities etc method.
If always there is difficulty in term of access and use of facilities for "stranger", it discourages the demand of it.

Actually house owner that using the property for STR for short term gain is killing their own property value only without realising.
Who want to buy a condo/apartment that fill with STR?

aurora97
post Jun 19 2015, 01:19 PM

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QUOTE(xl2778 @ Jun 19 2015, 10:05 AM)
I have seen below clause in Deed of Mutual Covenant, does it mean short term stay is allow

The Vendor hereby fully reserves it absolute right and liberty, as it sole discretion, to use and or convert the SOHO, wholly or partially, into a hotel, guest house, hostel or inns regardless of whether the vendor shall operate the hotel on its own or through another or through an outright sales of the SOHO, wholly or partially , to another for this purpose.

The purchaser agrees and accepts that it is the vendor sole and unquestionable right, privilege and liberty to use and convert the SOHO, wholly or partially into a guest house, hostels or inns or any commercial entity at its sole discretion.
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I just noted this pt.

Possible.

Although the DMC/House Rules may permit such activity to be carried out, you may also want to consider federal legislation/local (state/municipal) by laws. Federal legislation/local (state/municipal) by laws will trump your DMC and where necessary, you may be required to obtain license to carry out certain businesses (i.e. hotel/inns).


This post has been edited by aurora97: Jun 19 2015, 02:23 PM

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