Strata Management

Strata Management Case Updates 9 – How to deal with AirBnb parcels?

Salil Innab and Teng Keng Han v Badan Pengurusan Bersama Setia Sky Residences, Kuala Lumpur High Court, Originating Summons No. WA-24NCVC-776-04/2018 [2018] 1 LNS 1323

There are several AirBnb cases pending in courts. Unfortunately not all of them were reported. There is one pending an appeal in the Court of Appeal involving Verve Suites and we will write about it when the decision is out.

Facts:

The 1st Plaintiff is a tenant and the 2nd Plaintiff the parcel owner. The 1st Plaintiff rented the property from the 2nd Plaintiff for purposes of sub-letting it to 3rd party on a short-term basis. The 1st Plaintiff also rented other parcels within the development area for purposes of carrying out the short-term rental business through Innab Trade Sdn Bhd.

The JMB was aware of these arrangements. The Plaintiff claims that there is in place a short term rental operators standard operating procedure dated 25.3.2017 regulating the 1st Plaintiff and the employees of Innab Trade Sdn Bhd.

Controversy arisen after the JMB took a different view of the short-term rentals and began to interfere with and obstructed the Plaintiffs from carrying out the business.

In this regard, the Plaintiff filed an ex-parte injunction which was allowed. Ad-interim injunction was also allowed pending filing of affidavits. Both parties went before the court to argue inter-parte thereafter.

Decision

The Court after hearing both parties allowed the inter-parte injunction. Reasons given:

(a) status quo should be maintained pending the hearing of the originating summons;

(b) continued interference with or obstruction of the short-term rentals may likely to cause irreparable damage to the goodwill of the business and damage to goodwill cannot be easily remedied with monetary compensation;

(c) 3rd parties are involved (the short-term tenants) and balance of convenience is weighed in the favour of those short-term tenants

takeaway

Although the issue of whether AirBnB or short-term rentals are allowed in a strata development, it is not open secret that the Commissioner of Buildings are taking a view that the strata development area should self-regulate and put the motion (of whether to allow or refuse such short-term rentals) forward at a general meeting to be discussed and voted upon. The resolution to be deliberated upon must be drafted well enough to allow parcel owners / proprietors to determine the issues in its entirety. A resolution in restraining short term rental activities will also usually requires amendments be made to the by-laws.

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If you wish to know how to regulate, draft a resolution and/or move a general meeting to deliberate on the issue of short-term rental, kindly write in to hello@burgielaw.com

*An update on 9.11.2018. This injunction was dismissed by the Court of Appeal on 5.11.2018.

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Disclaimer: The content provided on this website does not constitute legal advice but are for general informational purposes only. It may not be the most up-to-date legal information after the published date. To seek professional legal advice, please check with your lawyer.
Lai Chee Hoe
Partner at Chee Hoe & Associates. With 10+ years of experience under his belt, he specializes in civil and corporate litigation. He is also the current Chairperson of various Joint Management Bodies.

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