Can residents ban short-term rentals in their buildings?

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Residents Can Ban Short-Term Rentals in Their Buildings Under Specific Conditions

Yes, residents in high-rise apartments in Malaysia can ban or restrict short-term rentals within their buildings. This power is primarily derived from the Strata Management Act (SMA) 2013, which allows for the collective enactment of rules by proprietors. If a majority of residents vote to make a rule against commercial renting a binding by-law, it becomes enforceable.
Legal Precedent Supports Resident Authority

The ability of residents to collectively ban short-term rentals has been affirmed by the Malaysian courts. In the 2020 Innab Salil & Ors v Verve Suites Mont’ Kiara Management Corporation case, the apex court confirmed the lawfulness of a special resolution passed by owners to prohibit short-term rentals. This precedent was further reinforced by the Court of Appeal in the Wawasan Raya v Marc Residence case, which stated that while short-term rental accommodation (STRA) services are not inherently illegal, management bodies can enforce by-laws against them, provided the proper statutory procedures, including voting and passing a by-law via special resolution, are followed.
Strata Management Act Empowers Collective Rule-Making

The Strata Management Act 2013 is the cornerstone legislation enabling residents to govern their shared living spaces. It grants proprietors the collective authority to establish rules that best suit their community. When a majority of residents agree to ban or restrict commercial renting, this decision is formalized into a binding by-law for the entire development. This mechanism ensures that community living standards are maintained according to the collective will of the residents, addressing potential nuisances or disturbances.
Incoming Framework Expected to Reinforce Resident Powers

A forthcoming national regulatory framework is anticipated to further strengthen the powers of residents. Reports suggest this framework will bolster the ability of management corporations to enact rules governing commercial letting. While the specifics of the framework are still being developed, it is expected to provide clearer guidelines and potentially introduce licensing requirements for short-term rental operators, while reinforcing the existing rights of residents to manage their strata properties.

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Can residents ban short-term rentals in their buildings?

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