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 Mix Development and Short Term Rental, daily rental

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aurora97
post Jun 19 2015, 09:13 AM

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Am not familiar with mix development...

Very interesting questio by TS....

My question though... Mixed dev or service apt/Condo sit on commercial land and has a commercial title to the parcel, if I can a business (making it into an office) from my apt/Condo, what's stopping me from short term renting?

What's the purpose of service apt/Condo in the first place???
aurora97
post Jun 19 2015, 09:16 AM

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QUOTE(cherroy @ Jun 19 2015, 09:05 AM)
You can't set a by law that restrict individual owner to do on their property.

If the renting indeed violated the council rule (please read the old thread that I mentioned before about the running an illegal commercial activities without local council license), then you can report the matter to the local council.

The law is weak and plenty of grey area to tackle such an issue.
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You can set rules that regulate the common area and make it difficult to run commercial activities...

As for renting out, there is a landlord in my Condo (residential), he has about 50+ units... Its very difficult to moniyor who is on short or long stay, the best way would be to amend the house rules.

Just a thought...

This post has been edited by aurora97: Jun 19 2015, 09:18 AM
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!
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
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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.

aurora97
post Jun 19 2015, 10:53 AM

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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.

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?

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])

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.
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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).

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
aurora97
post Jun 19 2015, 04:00 PM

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QUOTE(NikAriff @ Jun 19 2015, 03:46 PM)
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.
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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
aurora97
post Jun 19 2015, 05:24 PM

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QUOTE(cherroy @ Jun 19 2015, 05:19 PM)
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.
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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.

aurora97
post Jun 19 2015, 05:32 PM

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QUOTE(puchongite @ Jun 19 2015, 04:56 PM)
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 ?
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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.
aurora97
post Jun 20 2015, 11:59 AM

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QUOTE(CasLatency @ Jun 20 2015, 11:18 AM)
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.
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careful HDA some of the articles Are out-dated.

QUOTE(NikAriff @ Jun 20 2015, 11:25 AM)
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.
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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.

 

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