TO RESTRICT OR NOT?

Restrictions on AirBnb vary from country to country. We check out how China, Singapore, Thailand, Malaysia, The Philippines, Taiwan, Japan and London are faring.

PHILIPPINES

Tech-ready but…

“AirBnB thrives best under certain conditions – low hotel vacancy, reasonable public safety, efficient public transport, socially responsible culture and administrative efficiency. It also serves 2 different markets – inter-city and international travellers. As long as the legal and administrative elements are in place, we see no reason why AirBnB would not work in the Philippines. For the local inter-city market, there might be lesser cultural issues with lower expectations. For international travellers, however, accommodation quality and service efficiency might put most off AirBnB in favour of hotels. A quick check online will reveal horror stories such as last minute cancellations by landlords, unpaid electric bills leading to power outage, misrepresentation of location and amenities, even homes which completely do not exist. AirBnB in the Philippines might be a case where technology is ready to facilitate but the people are not ready to accommodate.”

Jonathan Jie is Head of Projects & Operations at RunningStream International Pte Ltd based in Singapore.

LONDON 90 Days Max

“We were looking at offering a short-term rental service to clients wanting to generate short-term income from their properties but decided against it due to the fact that many head leases in London prevent you from short letting. Additionally, AirBnb landlords in Greater London are restricted to letting their homes out for no more than 90 days per year, so permanent tenants would provide a more constant revenue stream.”

Camilla Dell is Managing Partner at independent property buying agency, Black Brick

TAIWAN Welcome, Welcome

“AirBnb has been in Taiwan for 2 years, accommodating over 829,000 tourist in 2016, a 216% growth y-o-y. International tourists to Taiwan increased from 3.8 million in 2008 to 10 million in 2015. Chinese tourists increased to around 4 million in 2015, representing over 10 times growth within 8 years. Rapid increasing international arrivals has led to strong hotel demand in Taiwan and shopping spree from Chinese tourists.”

Tony Chao is Managing Director of Jones Lang LaSalle Taiwan.

MALAYSIA Free For All

“Under the National Land Code, a property owner can rent out his property for any period of time from one day to unlimited days. The only distinction is the name assigned to such a rental. If the tenure is less than 3 years, it’s called a tenancy while if it’s over, it’s called a lease. A tenancy agreement can be either contracted orally or in writing.

If it’s a condominium or strata property, then you have to look at the house rules which every owner has agreed to.

Section 44 of the Strata Titles Act states that no bylaw by the management should infringe upon your right to rent out your apartment. Currently, many JMBs (Joint Management Board) have started to pass bylaws to in an attempt to restrict AirBnb; notwithstanding that the court has said it’s fine because no one can stop you from renting out to tourists or anyone else.

But the JMB cold make it difficult for you like making it mandatory for your guests to register themselves or requiring the owner to be present when they register at the guardhouse.

In Penang, owners of an apartment is fighting a court battle against the city council in order to get clearance to rent out under AirBnb. KL City Hall meanwhile has no objection to short-term rental arrangement, neither does the Ministry of Urban Wellbeing, Housing and Local Government. Over time, however, expect some form as regulation as this practice becomes more widespread. Some regulations may be good to filter out unscrupulous hosts.”

Ikhram Merican, successful AirBnb host in Malaysia

JAPAN Max 180 Days

As of early March, Prime Minister Shinzo Abe’s Cabinet approved rules limiting home-sharing by private citizens to 180 days a year while leaving room for local authorities to impose their own restrictions. The final draft has been submitted for approval to the Diet.

Japan is receptive to AirBnb owing to a tourism boom which has resulted in a shortage of hotel accommodation. As a result, the land of the Rising Sun is AirBnb’s fastest-growing market with 48,000 listings to date. With the Olympic Games coming up in 3 years’ time, the demand for rooms is only going to increase in the coming months.

There is a caveat however; absentee landlords would find the 180-day restriction not feasible for their business. It may force some to give up a second source of income and become a full-time rental property operator. In addition, those who rent properties to rent out under AirBnb would have to seek the landlord’s permission and obtain an operating license. There are several ways around it however, but it would depend on how strictly the rules are enforced, says a current AirBnb operator in Tokyo.

According to reports, AirBnb accommodated 3.7 mil of the 24 mil overseas visitors to Japan in 2016. By 2020, the visitor number is predicted to hit 35 mil.

THAILAND Minor Restrictions

“As at end 2016, renting out your room through AirBnb does not strictly violate any law in Thailand. However, it’s worthwhile to check your condominium rules and regulations first before listing it.

The law likely to apply to accommodation like AirBnb is the exemption in the Hotel Act: “Any residential premises open to the public for rental with no more than 4 rooms on all floors in aggregate whether in a single building or in several buildings, and with a total service capacity of 20 guests, operating as a small business which provides an additional source of income for the owners” is exempt from the Hotel Act. The owners of such premises are also required to report to the Hotel Registrar but do not require a Hotel License and do not have to comply with all requirements for hotels.”

Letting the room for temporary stay may cause nuisance and concerns about security to other residents. There might be a complaint lodged by your neighbor – this issue is being debated and might give rise to new regulations soon.”

Laksamon Dhamminch is Managing Partner of Fusion Break Ltd., a law firm based in Bangkok.

CHINA Embracing Sharing

At present, there isn’t any restriction on AirBnb letting in China. In fact, the market is filled with at least 2 other Chinese home-grown competitors who mostly target Chinese guests. With a recent USD100 mil injection by state-owned sovereign wealth fund China Investment Corporation, the San Francisco company can feel secure in the knowledge that there won’t be adverse regulations against it for some time. Two other Chinese companies – Sequoia Capital and China Broadband Capital also have stakes in AirBnb.

To strengthen its competitive advantage, Airbnb has rebranded its Chinese subsidiary as “Aibiying,” which means “welcome each other with love.” For payments, Airbnb has already started accepting Chinese mobile payment solutions such as Alipay. It also partnered with Chinese tech giant Tencent to have its services built into WeChat, which now serves an important distribution channel for Airbnb in China.

China is an important market for Airbnb. To date, there have been more than 3.5 million guest arrivals by Chinese travellers at Airbnb listings all over the world, according to Airbnb.

The USD31 billion hospitality company will be up against Chinese company Tujia.com, a direct competitor that’s also raised a lot of cash and is valued at over USD1 billion by its backers.

SINGAPORE Mulling Flexi Rules

Presently, the Urban Redevelopment Authority (URA) states that private home owners who wish to rent out their properties for less than six months cannot do so lawfully unless they obtain permission from them. The national planning authority also limits the number of unrelated tenants in private apartments to six. New regulations introduced in February however gives a lot of power to URA officers to enforce the rule, for example, allowing them to question owners or demand information on the rentals, take on-site video evidence and even conduct forced entry into suspected homes. Those convicted are liable to fines of up to S$200,000 or a maximum jail term of one year. The URA has allegedly seen a 60% rise in home-owner complaints in 2016 over nuisance and safety concerns.

The good news is the Ministry of National Development is currently exploring the possibility of creating a new ‘class’ of private apartment owners (both existing and new) who will be permitted to rent their homes on a short-term basis.

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