The proliferation of short-term rental accommodation (STRA), or short-term letting (STL), in Malaysia marks a paradigmatic shift in the landscape of tourism and urban space. STRA has not only redefined the contours of consumer choice offering personalised and economically accessible alternatives to conventional lodging but also challenged established notions of residential stability, community integrity and the socio-legal function of property. STRA offers travellers a wide variety of accommodation options that serve as alternatives to traditional lodging, appealing especially to cost-conscious consumers seeking flexible and personalised stays. However, the growth of STRA has also given rise to tensions, particularly among permanent residents and property owners who report disturbances and disruptions linked to such rentals. Despite these developments, Malaysia currently lacks a specific, centralised legal framework to regulate STRA activities. Instead, relevant provisions are scattered across various legislative instruments, and their interpretation and enforcement vary between states and local authorities. This fragmented approach has led to legal uncertainty and inconsistent regulation. In light of these issues, this study aims to critically evaluate the current legal landscape governing STRA in Malaysia by analysing applicable statutes, subsidiary legislation and judicial decisions. By examining the legal challenges and policy gaps, the research underscores the pressing need for a cohesive national regulatory framework tailored specifically for STRA. Comparative insights from countries such as Australia which has implemented more structured and localised STRA regulations was incorporated to highlight potential pathways for reform and regulatory harmonisation in the Malaysian context.
This paper uses a qualitative research method. The important characteristic of qualitative research is that it involves observation and document analysis that value depth over quantity. It focused on understanding human experiences, behaviours, meanings and social phenomena through non-numerical data. Instead of measuring things with numbers, qualitative research explores how and why people think, feel or act in certain ways. Thus, report of disturbances and disruptions linked to STRA by the property owners is analysed to determine the gaps in the law. In line with this, relevant legislations and subsidiary legislations were analysed. To gain a comprehensive understanding of the technical and legal aspect governing STRA, a review of relevant previous literature was conducted. Sources from journal articles and books which can be accessed from online databases including LexisNexis, CLJ Law, Emerald and other online platforms such as Google Scholar and ResearchGate were referred to. In addition, comparative insights will be drawn from the regulatory practices of New South Wales and Western Australia, offering a broader perspective on how similar legal issues are addressed in the Australian context.
In Malaysia, local planning authority (LPA) is the responsible agency to regulate land use and development activities within its local jurisdiction. It is the LPA which issued planning permission under the Town and Country Planning Act 1976 to project proponent to build strata property or landed property. However, once the owner changes the use of their property for STRA, there is no specific law regulating the practice. Penang being one of the first state to introduce a clear guideline to address the legal concerns and requirements surrounding STRA. The absence of a coherent, centralised statutory framework has resulted in a patchwork of regulatory responses, often inconsistent across states and local authorities. Despite its economic benefits, STRA raises social concerns like neighbour conflicts, housing insecurity and unclear laws that need deeper legal analysis. Furthermore, the Federal Court decision in Innab Salil and Ors v. Verve Suites Mont’ Kiara Management Corporation [2020] 10 CLJ 285 is referred to in discussing the conflict between Management Corporation (MC) of the strata property with owner of STRA. Accordingly, the house rule which explicitly prohibits all forms of short-term rentals within the property, particularly those advertised through online platforms and booking websites is a valid and bind the other owners. The laws governing STRA in Australia is also fragmented based on its specific state and territory. However, across Australia, NSW has the most comprehensive and uniform STRA regulatory framework.
The novelty of this paper lies in its analysis of the Federal Court’s decision in Innab Salil and Ors v. Verve Suites Mont’ Kiara Management Corporation which critically engages with the legal validity of house rules restricting owners from engaging in STRA activities. This decision will determine the future development of STRA in every strata property and prepare the LPA with another house rules passed by the MC. Consequently, this research will contribute to the body of knowledge and discussion relating to the legal position of STRA in Malaysia.
