Hi Good day,

Just gone through the document.

The Royal Malaysian Customs document on the GST and how it will apply to accommodation (in particular, paragraphs 5 - 10). This clearly states that service apartments which are sold for residential purposes (are demmed "residential" ; we cannot run a hairdressers' or an office there) are not subject to GST because they are not "commercial".

However, apartments run as a timeshare (paragraph 10e) ARE deemed to be "commercial" and are subject to the GST.

So this mean is clear that STR do some how are legal, in some way if they do it correctly.

To add:

Interestingly, while reading the Customs guidelines I noticed this:-

Under the Tourism Industry Act 1992, “accommodation premises” means any building including hotels, inns, motels, boarding houses, hostels, rest-houses and lodging-houses held out by the proprietor, owner or manager, either wholly or partly as offering lodging or sleeping accommodation to tourists for hire or any other form of reward, whether or not food or drink is also offered. Any person who carries on or operates accommodation premises shall be registered under such Act.

Read who is a tourist…. Believe me half the time you may be one LOL

“tourist” means any person, whether he is a Malaysian national or otherwise, visiting any place in Malaysia for any of the following purposes, namely— (a) pleasure, recreation or holiday; (b) culture; © religion; (d) visiting friends or relatives; (e) sports; (f) business; (g) meetings, conferences, seminars or conventions; (h) studies or research; (i) any other purpose which is not related to an occupation that is remunerated from the place visited;

So, what does this mean?

It’s possible for those who let based on STR may be subject to Tourism Industry Act 1992.

Heavy penalties await for those who do not have license to do such activities.

Hahahahahaa….

This post has been edited by aurora97: Jun 19 2015, 04:01 PM

The only problem is that Cherroy is of the view that what's considered "commercial activity" for GST purposes may not be the same as "commercial activity" for strata title management.

You can't drag something on GST treatment into Strata Management issue.

GST concern about how the property being sold whether need to charge GST or not, because GST is exempted for residential properties/purposes.

While another front is STR is legal or not under Strata act or any other act.

Both issues are not relating to each other.

So far, Strata Management act or even local council rules is silent on STR issue.
While only local council rules is against STR based on commercial activities being run at residential premise which is prohibited.

what type of facilities that caused nuisance to you? swimming pool? are you occupying and fully utilize those facilities? Ask you self first.

very interesting and informative debate going on here

the problem in this country is enforcement by the relevant authority - the rules, regulations, and guidelines
are in place but if there is no enforcement, it really means its as good as not having them..

having to go through the courts to get a remedy is costly and time consuming

I do know of actual high rise strata development that does not permit STR and its stated clearly in the HR but
again, enforcement is a little tricky.

The concern of STR is not about nuisance, but more about security issue, while longer term property value itself.

Security issue is one of top agenda of property purchaser nowadays.
It is difficult to have tight and good security with the property is full of STR.

An apartment with plenty of STR may drive away purchasers, hence poorer value for the property.
It also may result in more difficult for MC to manage, as well as may incur higher cost to maintenance as STR visitor may not take good care of the property, eg, throwing rubbish simply etc.

I agree totally ..security is a huge issue..who wants to leave in a condo where you have practically different people
walking in and out all the time..first v know STR will not take care of the place ..secondly it really does impact on the value ..we all know that owner occupied condos fetch better value as the building is also better maintained.

So meaning we could call the local council people to give trouble to those people who runs STR in a residential premise such as a service apartment because it's a commercial activity and requires additional permit or something ?

nowaday lavish condo or apartment with 4 tiers security check, CCTV every corner, Security patrolling all round the clocks, still doesnt sounds good? Nothing is guarantee nowaday. Even bungalow with own armed security and guard dogs also got chance to break in.

FYI, my apartment mgt assigned a guard to sit next to pool to register all the users. Im not sure what the purpose doing so which i think some people might having the same mind with TS, kiasu. But for me, i never use the swimming pool says 2 years redi and im paying rm400 every month.

Anywhere also having vandalism and bad tenants. Its depends how concern and discipline from the entire residents.

This is not a jail. we can force people to behave or what. But there will be regulation, surveillance and hired enforcer to make sure all in hands.

Yes, there was a case before which appeared in newspaper as well.

The apartment just beside a hospital, while the hospital is famous for "medical tourism" especially for nearby country citizen. A few property owner reap short term gain through the STR by renting to those "tourist" a day or two only, which lead to many owner complain to local authority.

But the fine was not heavy enough to deter future irresponsible owner to do STR, sadly to say.
That's why there is a need to Strata Management act to govern such issue, or heavier local council fine for such activities.

But SRT only popular at city centre. and most of the time, SRT dont use the facility. Their short stay mainly for the convenience to visit around the area or some business matter.

Im not sure how SRT issue can evolve until safety issue is a huge concern, then type of building use allowed.

If you have joined in the MC/JMB before and running the management before, only then you will realise STR is a very problematic matter for management.
I involved in JMB/MC before, all sort of issues arised in a building management something can be out of imagination as well.

Yes there may be bad tenants as well as owner. But STR problem as compared has way higher probability and difficult to solve.
At least something arised time, you can call the owner or tenant come to resolve. STR, the person no longer there, while the owner said, he/she is not responsible something not done by him/her.

Only vested interest party support STR,
while actual owner that living inside as well as those care about their property value over long term, I don't see how they are not against STR.

I agree on this point.

My condo use to be occupied by students.

Every other month, you will be talking about damage to this and that.

You don’t feel it until you become a victim.

Wait until you actual run the management, and experience how problematic STR can be, it is difficult to explain.

There were cases, syndicate of burglar STR on a unit and break into many unit in the building, to cover up the burglary activities, as the stolen items was stored inside the unit, and slowly transported out. As they have the access card to enter and exist easily through the STR.

Illegal activities/syndicate may love STR as well. As in ordinary renting of a place, tenancy agreement needed, which you need to know your tenant identity, IC needed to stamping the agreement.
While STR, they just pay the money, can use the place as hub for illegal activities without leaving trace of identity.

This post has been edited by cherroy: Jun 19 2015, 05:30 PM

Based on what I have gathered… the line of attack should be as follows:-

1st step
Read up on your DMC or house rules

2nd Step
DMC or house rules
(a) silent on the issue
(b) expressly prohibit
© expressly allow
(d) poor drafting incomprehensible

3rd Step
For (a) lodge complaint with COB.
For (b) lodge complaint with JMB/MC to enforce. If they fail to do so, escalate to COB.
For © lodge complaint to Ministry of Tourism and COB. (try your lucklor) LOL.
For (d) lodge complaint with COB, JMB/MC and Ministry of tourism.

4th step
Response satisfactory = end
Response not satisfactory= raise in AGM/EGM.

Hi,

Back to the actual question that Cas firstly ask we need to resolve:
1) Is Mixed development apartment falls under service apartment no matter is service residence or service suite.
- to my understanding any apartment that build on top of a commercial land falls under "service" and developer have use the term to mislead buyer. (Where can we get a solid proof to define it)

2) if is consider a service apartment can individual owner rent out daily?
- If time sharing club house are allow the main differ is they have a license and individual owner do not have, but it still mean STR do exits legally.

Regards
Nik

This post has been edited by NikAriff: Jun 19 2015, 08:25 PM

Hi I found this link,

http://www.hba.org.my/articles/iprop/2006-not.htm

It clearly say that Residences: Another name for Serviced Apartments

My Condo is Serviced Residences does that mean it is Serviced Apartments?

Is very confusing.

As mention in the articles:
if it is erected on any land designated for or approved for commercial development, it is not considered 'housing accommodation' as defined under the Housing Development (Control and Licensing) Act (Housing Act).

It say as long as is build on top of a commercial land is not consider housing accomodation, so to you question yes it is Service Apartment according to this articles.

careful HDA some of the articles Are out-dated.

Malaysian Bar Council

Does the definition of “housing accommodation” in the amended Act include serviced suites or apartments?

If the serviced suites or serviced apartments are intended for human habitation or partly for human habitation and partly for business premises, then they will fall within the definition of housing accommodation as amended. It does not matter if the accommodation is erected on a land designated or approved for commercial development as the Amendment Act has removed these words from the definition of housing accommodation inserted by the 2002 Amendment Act.