Short-term rentals are prohibited in residential apartments under the Strata Management Act and associated agreements, emphasizing the need for compliance with residential use regulations.

Introduction

[1] The Plaintiff's claim is for an injunction against the Defendants from using their private residential apartments in a project called the Marc Service Residence ("Marc Residence") for commercial purposes, by renting out the apartments for short-term rentals (STR).

[2] 202 owners of the apartments were first named as Defendants but eventually the trial proceeded against only 2 Defendants ie the 1st Defendant and the 203rd Defendant. The other Defendants had agreed to abide by the interim injunction imposed by the Court preventing the Defendants to let out their unit of apartment for STR.

[3] The Plaintiff proceeded for a full trial where the parties relied on oral testimony as well as documents to support the arguments of each party. The Plaintiff called 2 witnesses namely SP1 the Building Manager and SP2 the Chairman of the Plaintiff for the term 2019/2020. The Defendants called 4 witnesses.

Brief facts

[4] The Plaintiff in this case is the Managing Corporation incorporated by virtue of the Strata Management Act for the management of the Marc Residence. The Marc Residence is a 2-block, 35-storey apartment comprising 637 units of apartments located at No 3 Jalan Pinang 50450, Kuala Lumpur.

[5] The Plaintiff contends that the Defendants by giving out their apartments for STR have not only breached the agreements signed during the purchase of their property but also flouted many laws relating to residential property.

[6] Apart from breaching the agreements and the law, the action of the Defendants letting out their apartments for STR has caused a host of problems to the Marc Residence which includes the indiscriminate use of the common areas, appointment of commercial operators to manage the apartment for the STR, advertising the Residence as a 4-star hotel and unlawful use of the apartments for illegal activities which included drug abuse and prostitution.

[7] The Defendants' defence is that the apartments in the Marc Residence had from the very beginning been used for commercial purposes including for STR. This was allowed and done with the knowledge of all including the Plaintiff.

[8] The Defendants further contended that the House Rules did not prohibit STR and even if it did, it went against the Defendants' ownership rights of the apartment under the law.

[9] The Defendants' also contended that at the 6th Annual General Meeting of the Plaintiff it was resolved to amend the House Rules to allow and formalize the use of the apartment for STR with a penalty of RM200.00 to be imposed in the event the granting of STR causes any nuisance or losses to the common areas.

The Issue

[10] The main issue before the Court after considering all the evidence tendered by way of oral as well as documentary evidence is whether STR is allowed at the Marc Residence.

[11] In determining this issue the Court ruled that both the Plaintiff witnesses are competent witnesses who have full knowledge of the issue at hand. The Defendants' objection that the 2 witnesses are not authorized to testify on behalf of the Plaintiff is baseless.

[12] The Court has observed both the witnesses and regarded them as truthful and reliable witnesses and there is nothing to indicate from their testimony that they are unauthorized or incompetent to testify.

STR

[13] In considering the e