Yew Huoi, How & Associates | Leading Malaysia Law Firm

Menu

PROPERTY LAW – STRATA MANAGEMENT ACT 2013 – REGULATING SHORT-TERM RENTALS: A LEGAL PERSPECTIVE ON STRATA MANAGEMENT AND STATE LAWS

ILLUSTRATIVE SCENARIO

The Management Corporation of “Happy Suites”, established under the Strata Titles Act 1985, manages a development designated for commercial use as service apartments by state authority’s mandate as per section 120 of the National Land Code 1965 (“NLC 1965”). Subsequently, during an Extraordinary General Meeting, a special resolution was adopted introducing a “House Rule” that restricts the use of units exclusively to service suites, prohibiting business activities, short-term rentals or other uses that could potentially damage the reputation of Happy Suites. Despite this, X has continued to use his units for commercial short-term rentals.

Legal Principles & Law:

• The Extraordinary General Meeting was held under the Strata Management Act 2013 (“SMA 2013”). The SMA 2013 is recognized as social legislation to enhance strata community living. As such, the SMA 2013 calls for a liberal interpretation that prioritizes community well-being.

• The Federal Court in Malaysia prefers the approach of harmonisation of status and suggests that section 120 of the NLC 1965 and section 70 of the SMA 2013 should be read together harmoniously, indicating that rights granted by one law can be restricted by another for broader community benefits.

• As such, the Management Corporation has the authority to enact by-laws under Section 70 of the SMA 2013, addressing safety and security concerns. Such by-laws are deemed justifiable and lawful even if they impose restrictions beyond those set by the State Authority.

Reference Cases:

• Federal Court (Putrajaya) – Innab Salil & Ors v. Verve Suites Mont’ Kiara Management Corporation [2020] MLJU 1563; [2020] 12 MLJ 16

• Ang Ming Lee & Ors v. Mentari Kesejahteraan Bandar, Perumahan dan Kerajaan Tempatan & Anor and other appeals [2020] 1 MLJ 281

• Weng Lee Granite Quarry Sdn. Bhd. v. Majlis Perbandaran Seberang Perai [2020] 1 MLJ 211

Back to Latest Legal Updates

Recent Post

STRATA MANAGEMENT – MANAGEMENT FEE SHOWDOWN – RESIDENTIAL VS. COMMERCIAL – WHO’S PAYING FOR THE EXTRAS?

In a landmark decision in Aikbee Timbers Sdn Bhd & Anor v Yii Sing Chiu & Anor and another appeal [2024] 1 MLJ 94 , the Court of Appeal clarified the rules on maintenance charges and sinking fund contributions in mixed strata developments. Developers and management corporations can impose different rates based on the distinct purposes of residential and commercial parcels. The judgment emphasizes fairness, ensuring residential owners bear the costs of exclusive facilities like pools and gyms, while commercial owners aren’t subsidizing amenities they don’t use. This ruling highlights the importance of transparency in budgeting and equitable cost-sharing in mixed-use properties.

Read More »
16 December ,2024 No Comments

ILLEGALITY OF UNREGISTERED ESTATE AGENTS’ CLAIM – FINDER’S FEES AND ILLEGALITY: COURT DRAWS THE LINE ON UNREGISTERED ESTATE AGENTS

In a pivotal ruling, the Court of Appeal clarified that finder’s fee agreements are not automatically void under the Valuers, Appraisers, Estate Agents and Property Managers Act 1981. The Court emphasized that illegality must be specifically pleaded and supported by evidence, and isolated transactions do not trigger the Act’s prohibition. This decision highlights the importance of precise pleadings and a clear understanding of the law’s scope.

Read More »
16 December ,2024 No Comments

COMPANIES ACT – OPPRESSION – DRAWING THE LINE: FEDERAL COURT DEFINES OPPRESSION VS. CORPORATE HARMS

In a decisive ruling, the Federal Court clarified the boundaries between personal shareholder oppression and corporate harm, overturning the Court of Appeal’s findings. The Court held that claims tied to the wrongful transfer of trademarks belonged to the company, not the individual shareholder, reaffirming that corporate harm must be addressed through a derivative action rather than an oppression claim.

Read More »
16 December ,2024 No Comments

COMPANIES LAW – WHEN DIRECTORS BETRAY: COURT CONDEMNS BREACH OF TRUST AND CORPORATE MISCONDUCT

In a stark reminder of the consequences of corporate betrayal, the court found that the directors had systematically dismantled their own company to benefit a competing entity they controlled. By breaching their fiduciary duties, conspiring to harm the business, and unjustly enriching themselves, the defendants were held accountable through significant compensatory and exemplary damages, reaffirming the critical importance of trust and integrity in corporate governance.

Read More »
16 December ,2024 No Comments

JURISDICTION – CHOOSING THE RIGHT COURT: THE SEA JUSTICE CASE HIGHLIGHTS WHERE MARITIME DISPUTES SHOULD BE HEARD

In The Sea Justice cases [2024] 2 Lloyd’s Rep 383 and [2024] 2 Lloyd’s Rep 429, the Singapore courts tackled a key question: which country should handle a maritime dispute when incidents span international waters? After examining the location of the collision, existing limitation funds in China, and witness availability, the courts concluded that China was the more appropriate forum. This ruling highlights that courts will often defer to the jurisdiction with the closest ties to the incident, ensuring efficient and fair handling of cross-border maritime disputes. This approach is also relevant in Malaysia, where similar principles apply.

Read More »
17 November ,2024 No Comments
en_USEN
zh_TWZH ms_MYMY en_USEN
× Contact Us