Short-Stay Rental Rules and Auction Condos: What to Check

Anyone bidding on an auction condo or serviced apartment with a plan to run it as an Airbnb-style short stay got a clearer picture of the rules this week. The national framework now taking shape will not override building by-laws, and listing platforms are expected to do the policing.

What happened

According to EdgeProp, Deputy Housing and Local Government Minister Datuk Aiman Athirah Sabu told the Dewan Rakyat on Monday, October 26, that the proposed short-term rental accommodation (STRA) framework will keep strata management rules in place. Only registered premises that meet local authority licensing conditions would operate legally.

The government also wants digital platforms to run automated licence checks before a property is listed, and to take down listings for unlicensed premises or premises that breach local authority conditions or other laws, EdgeProp reported.

The guidelines are being drafted by PLANMalaysia with the Tourism, Arts and Culture Ministry (Motac), state governments and local authorities. The draft is in final review with Motac, then goes to Cabinet and the National Council for Local Government before states and councils adopt it. Media Selangor reported the same sequence on October 6, quoting Minister Nga Kor Ming, so no date for the rules to take effect has been given.

On a possible 180-night yearly cap, the deputy minister said any limit has to balance owners' income and tourism demand against safety and residents' wellbeing. No nationwide cap was announced.

Separately, EdgeProp reported on October 23 that Penang will raise its room limit for private short-stay premises from five to 10 and cut licence fees from January 1, 2027. That is a Penang rule only, but it shows states will set their own details.

What it means for auction buyers

The key line is that operators in strata buildings stay bound by the by-laws of the joint management body (JMB) or management corporation (MC) under the Strata Management Act 2013. EdgeProp pointed to the 2020 Federal Court ruling in the Verve Suites Mont' Kiara case, where an MC house rule banning short-term rentals was upheld even though the land carried a commercial-use condition.

For a lelong buyer this matters more than for a normal buyer. You usually cannot view the unit, you buy on an "as is" basis, and the building's by-laws come with the unit. If the MC has banned short stays, a national licence will not help you. If your numbers only work with nightly rentals, the by-laws are as important as the reserve price.

This applies mostly to bank auction condos and serviced apartments, where short stays are concentrated, in city-centre and Mont Kiara style developments listed under auction property in Kuala Lumpur. Landed homes, shop offices and factories are not the target of this framework.

Practical steps before you bid

Ask the management office for the current house rules and any resolution on short-term rentals, and read the minutes of the latest AGM if you can get them.
Check whether the local council already requires a licence or permit, and what conditions apply to the building's land use.
Price the unit on a long-term rental basis first. Treat short-stay income as an upside you have not yet confirmed, not the base case.
Remember that platform licence checks, once in force, could remove listings for unlicensed units quickly.
Look at how similar units have actually sold. BidNest's market report shows a 41.6% clearance rate for auction apartments, and the full round-by-round data helps you judge whether waiting for a later round is realistic.

This is general information, not legal advice. Have a lawyer check the title, the by-laws and the Proclamation of Sale before you bid, and see our lelong buying guide for the auction steps.

Frequently Asked Questions

Can I run an Airbnb in an auction condo I buy?

Only if the building's by-laws allow it and the local authority's rules are met. Under the proposed national framework, JMB and MC by-laws under the Strata Management Act 2013 stay in force. Check the house rules before you bid, because you buy an auction unit as it is.

Is there a 180-night limit on short-term rentals in Malaysia?

Not nationwide. The deputy housing minister told Parliament on October 26, 2026 that any cap must balance owners' income, tourism and residents' wellbeing, and no national cap was announced. Individual states and councils may set their own rules.

When will the national short-stay rental guidelines take effect?

No date has been given. The draft is in final review with Motac, then goes to Cabinet and the National Council for Local Government, after which each state and local authority must adopt it.

Does the framework affect landed or commercial auction property?

The framework targets short-term rental premises, and the strata rules discussed apply to condos and serviced apartments. Landed homes, shop offices and factories are mostly governed by local council licensing and land-use conditions instead.