Legal Guide to Airbnb and Short-Term Rentals in Malaysia’s Strata Properties
The Rise of Airbnb and the Legal Grey Zone in Malaysia
The short-term rental phenomenon — led by platforms like Airbnb, Agoda Homes, and Booking.com — has transformed Malaysia’s property landscape. Property owners see it as an opportunity to generate passive income, while travellers enjoy affordable, home-like stays in city centres and holiday destinations.
However, the surge in short-term rentals has also sparked disputes between individual owners and Joint Management Bodies (JMBs) or Management Corporations (MCs), particularly in strata-titled properties such as condominiums and serviced apartments.
This raises a critical question:
Are Airbnb rentals legal under Malaysian strata law?
This article by us explores and explains the legal framework, rights and obligations of owners, and the enforcement powers of JMBs and MCs under the Strata Management Act 2013 (SMA 2013) and related regulations.
1. Understanding Strata-Titled Properties and the Law in Malaysia
Before exploring Airbnb legality, it’s important to understand what “strata-titled” property means under Malaysian law.
1.1 What Is a Strata-Titled Property?
A strata title refers to a form of property ownership introduced under the Strata Titles Act 1985, where multiple owners share ownership of common areas (like lifts, corridors, and facilities) while holding individual titles to their specific units.
Typical examples include:
- Condominiums and serviced apartments
- Office towers
- Mixed-use developments (residential + commercial)
Each owner automatically becomes a member of the JMB or MC once strata titles are issued.
1.2 Role of the JMB and MC
Under the Strata Management Act 2013, the Joint Management Body (JMB) (for buildings before strata titles are issued) and the Management Corporation (MC) (after strata titles are issued) are responsible for:
- Managing common property
- Enforcing house rules and by-laws
- Ensuring safety, security, and harmony among residents
Because of these roles, JMBs and MCs often find themselves in conflict with owners who operate short-term rental businesses within the building.
2. The Legal Framework Governing Airbnb and Short-Term Rentals
Unlike traditional tenancies, Airbnb or short-term rentals fall into a legal grey area in Malaysia. There is currently no single federal law that explicitly bans or permits them. Instead, the legality is determined through:
- Local authority by-laws (city councils)
- The Strata Management Act 2013
- The Strata Management (Maintenance and Management) Regulations 2015
- Building-specific by-laws and house rules
2.1 Local Authority Regulation
Each local council has its own stance on short-term rentals. For instance:
- Kuala Lumpur City Hall (DBKL) has stated that short-term rental activities in residential zones are not permitted unless licensed under specific conditions.
- Penang Island City Council (MBPP) has proposed strict controls, especially for residential buildings.
- Johor Bahru City Council (MBJB) and other local councils have also echoed similar restrictions for residential strata properties.
Therefore, before operating an Airbnb, owners must first check local council zoning laws.
3. What the Strata Management Act 2013 Says About Airbnb
3.1 The Role of By-Laws
The Strata Management Act 2013 (SMA 2013) and Regulation 28 of the Strata Management (Maintenance and Management) Regulations 2015 empower JMBs and MCs to enforce by-laws concerning the use and enjoyment of strata units.
By-laws may prohibit or regulate:
- Nuisance and noise
- Use of units inconsistent with their intended purpose
- Short-term rentals or transient lodging
If the building’s by-laws prohibit “commercial use” in a “residential property,” then using the unit for Airbnb may constitute a breach of by-laws.
3.2 By-Law 28(1) — Use of Parcel
Under Third Schedule of the 2015 Regulations, By-Law 8(9) states:
“[A proprietor shall] not use or permit to be used his parcel contrary to the terms of use of the parcel shown in the plan approved by the relevant authority.”
Therefore, if a residential parcel is used for transient commercial accommodation (Airbnb), it may breach this default by-law.
4. Landmark Malaysian Court Cases on Airbnb and Strata Law
Our Malaysian court have clarified the legal position on Airbnb operations in strata properties. Below is the key precedent:
4.1 Innab Salil & Ors v Verve Suites Mont’ Kiara Management Corporation [2020] 10 CLJ 285 – Federal Court
This was the first major Malaysian case addressing Airbnb legality in strata schemes.
Facts:
Owners of Verve Suites rented out their residential units on Airbnb. The MC passed a by-law banning short-term rentals.
Issue:
Whether the MC had the legal authority to prohibit Airbnb operations.
Decision:
The High Court held that:
- The MC has the power to pass by-laws restricting short-term rentals.
- Airbnb-type operations constitute “commercial activity,” inconsistent with residential use.
- The ban was valid and enforceable.
The Judgment of the High Court was eventually upheld by the Court of Appeal and Federal Court.
This case set the precedent that MCs and JMBs can restrict Airbnb use through valid by-laws.
5. Rights and Obligations of Property Owners Under Strata Law
5.1 Owners’ Rights
Owners of strata units have the right to:
- Use and occupy their units;
- Lease or rent out their property;
- Attend and vote in JMB/MC meetings;
- Propose amendments to by-laws.
However, these rights are subject to compliance with the by-laws and SMA 2013.
5.2 Limitations on Airbnb Rentals
If the JMB or MC has passed a by-law prohibiting short-term rentals, the owner:
- Cannot legally operate an Airbnb, even if the property is privately owned.
- May face fines or penalties under the SMA 2013 for breaching by-laws.
- Could be denied access cards or facility use for the rented unit.
5.3 Enforcement by JMB or MC
Under Section 70(2) of the SMA 2013, JMBs and MCs have authority to:
- Issue warning letters or notices of breach;
- Impose compound fines (up to RM200 for each offence);
- Take legal action in the Strata Management Tribunal (SMT).
If owners continue to rent short-term, the MC can file a claim at the Tribunal seeking an order to stop the activity.
6. What JMBs and MCs Should Know Before Banning Airbnb
While the law gives JMBs/MCs authority, they must follow proper legal procedure when introducing or enforcing a ban.
6.1 How to Legally Pass a By-Law
Under Section 32 and Section 70 of SMA 2013:
- A by-law can only be passed by a special resolution at an Annual or Extraordinary General Meeting.
- The resolution must be filed with the Commissioner of Buildings (COB) for registration.
Failure to comply may render the by-law invalid.
6.2 Communication and Enforcement
Before enforcement, the JMB or MC should:
- Notify all proprietors in writing;
- Provide a grace period for compliance;
- Enforce consistently and fairly;
- Avoid arbitrary or discriminatory actions.
Improper enforcement could expose the JMB or MC to legal challenges for abuse of power or procedural irregularities.
7. Common Disputes Between JMBs and Property Owners
Short-term rentals often cause tension within residential strata schemes. Common disputes include:
- Security Concerns: Frequent strangers entering the premises.
- Noise and Nuisance: Late-night check-ins or parties.
- Insurance Issues: Common property damage or liability coverage gaps.
- Overuse of Facilities: Airbnb guests crowding pools, gyms, or parking lots.
- House Rule Violations: Ignoring access procedures or smoking bans.
These issues often lead to Tribunal or court proceedings, particularly when JMBs or MCs issue enforcement notices or fines.
8. How the Strata Management Tribunal Handles Airbnb Disputes
The Strata Management Tribunal (SMT) was established under Part VIII of SMA 2013 to resolve disputes efficiently and cost-effectively.
8.1 Jurisdiction
The SMT can hear disputes involving:
- Breach of by-laws;
- Non-payment of maintenance charges;
- Enforcement of house rules;
- Misuse of property or common areas.
The Tribunal’s jurisdiction is limited to claims up to RM250,000 in value.
8.2 Common Airbnb-Related Tribunal Claims
- MC seeking an order to stop short-term rental use.
- Owner challenging the validity of an anti-Airbnb by-law.
- Neighbour filing a nuisance complaint due to Airbnb guests.
Tribunal decisions are binding and enforceable as a court order under Section 123 of SMA 2013.
9. Practical Guidance for Property Owners
If you are a property owner considering Airbnb, take the following precautions:
9.1 Check Your Building’s By-Laws
Review the house rules or by-laws passed at general meetings. If they prohibit short-term stays, operating an Airbnb may breach SMA 2013.
9.2 Verify Local Authority Approval
Contact your local council to confirm zoning and licensing requirements. Residential properties may not be zoned for commercial activity.
9.3 Understand Your Risks
Operating illegally could expose you to:
- Legal action by the MC or neighbours;
- Revocation of access privileges;
- Tribunal orders to cease operation;
- Possible fines or civil claims for nuisance or breach of by-laws.
9.4 Consider Long-Term Rental Alternatives
If your property is in a purely residential zone, a long-term tenancy agreement remains the safer and legally compliant option.
10. Practical Guidance for JMBs and MCs
If your JMB or MC faces Airbnb-related issues:
10.1 Conduct a Proper Survey
Understand residents’ views — some may support limited short-term rentals if managed properly.
10.2 Pass a Valid Special Resolution
Ensure the anti-Airbnb rule is passed in compliance with Section 32(2) SMA 2013 and filed with the COB.
10.3 Communicate Transparently
Issue written notices, conduct briefings, and allow feedback. Transparency reduces disputes and resistance.
10.4 Consistent Enforcement
Apply the rules equally to all owners to avoid allegations of bias or selective enforcement.
10.5 Seek Legal Advice When Necessary
Before taking legal or Tribunal action, consult a law firm experienced in strata law and property disputes, such as JY Ko Advocates & Solicitors, to ensure proper legal procedure and documentation.
11. Can Airbnb Be Legal in a Strata Property?
Yes — but only under certain conditions, including:
- The by-laws allow short-term rentals;
- The building is zoned for commercial or mixed use;
- The local council permits short-term accommodation;
- The owner complies with safety, insurance, and registration requirements.
Some serviced residences or SOHO developments (Small Office Home Office) may meet these conditions — but each case must be evaluated individually.
12. The Future of Short-Term Rentals in Malaysia
With growing demand from domestic and international tourists, the Ministry of Tourism, Arts and Culture (MOTAC) has proposed national guidelines for regulating short-term accommodations.
Possible regulatory developments include:
- Mandatory registration of hosts and units;
- Licensing requirements;
- Safety and insurance obligations;
- Differentiation between residential and commercial zones.
Until a uniform federal framework is enacted, disputes will continue to depend on by-laws, zoning, and Tribunal rulings.
13. Why Legal Advice Matters
Short-term rental disputes can escalate quickly. Whether you are an owner defending your right to rent your property, or a JMB enforcing community rules, every decision must align with the Strata Management Act and case law precedents.
At JY Ko Advocates & Solicitors, we provide:
- Legal advice on Airbnb and short-term rental compliance;
- Drafting and review of strata by-laws;
- Representation at the Strata Management Tribunal and High Court;
- Legal opinions for JMBs, MCs, and developers;
- Mediation and dispute resolution strategies.
Our experience in strata disputes, tenancy law, and civil litigation ensures that both owners and management bodies receive practical, enforceable solutions.
14. Conclusion: Balancing Rights, Responsibilities, and Community Harmony
Airbnb rentals under Malaysian strata law remain a complex issue balancing individual ownership rights with collective community interests.
In short:
- Owners must ensure compliance with zoning laws, by-laws, and SMA 2013.
- JMBs and MCs must follow proper procedures before enforcing bans.
- Legal advice is essential before taking any action or filing a Tribunal claim.
Whether you are a property owner exploring short-term rental income or a JMB managing building harmony, understanding the law is the first step toward avoiding costly disputes.
Contact JY Ko Advocates & Solicitors
If you’re facing an Airbnb-related dispute or wish to clarify the legality of your property use, contact us (JY Ko Advocates & Solicitors) today.
We help property owners, JMBs, and MCs navigate Malaysia’s complex strata laws, ensuring your property rights are protected and your legal position is secure.
Contact JY Ko Advocates & Solicitors to make an appointment today!
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Disclaimer: The above proposition is subject to actual facts and circumstances and shall never be referred as the actual law without seeking legal advice. Consult us for more information!