Frankly the current local council position is flawed for the following reasons:
1) Their only premise of "illegality" will be to claim that airbnb is a commercial activity and hence is not allowed unde the Town and Country Planning Act 1976 for residential zoned properties. Nonetheless, this becomes problematic of the unit is a commercial title?
2) As for Penang, they have the 1991 MPPP bylaw for Trade, Business and Industries (This is the channel MPPP is using to issue fines at the moment). I believe this requires "businesses" to have a license. Again this is flawed because airbnb can be argued as merely short term rental (which is not regulated in Malaysia) and NOT a business. Nonetheless, this is a bit of a "grey area". Points that help us justify that it is not a business will be as follows:
(a) There is no transactions at the house (i.e. no Point of Sale)
(b) At any point in time, there is only "one party" using the place, unlike a business that will cater to multiple parties at any point in time.
(c) I believe very few Airbnb hosts see even a 60% booking load on their property. Businesses usually need to involve more "activity".
(d) If short term rental is a business, then how about longer term tenancies? It seems the only distinguishing factor is time which I feel is a very shaky justification.
3) Some local government has come out to say that JMBs have the right to implement by laws that ban airbnb. Is this so? This is because according to the Strata Title Act 2013, JMB's cannot implement by laws which infringe upon an owner's right to lease.
4) I believe fundamentally there is propaganda war going on in Malaysia and the authorities are unwilling to decide either way hence creating ambiguity which allows for stake holders to "control the narrative". Nonetheless, I believe many of the decisions by local councils or even JMBs may be challenged in court and there is a possibility with a good lawyer and a smart judge, those decisions will be voided (at least until such time the parliament enacts laws otherwise).
Anyway, this is my two cents worth. We need to also group together and fight the narrative. I have written to the country manager for airbnb Robin Kuok to get them to push back on the narrative. I suggest you all do the same. Her email is robin.kwok at airbnb dot com.
