This story was originally published in the May/June issue of Dot Property Magazine. Regulations are constantly changing in regards to Airbnb in Southeast Asia and you are urged to consult with an expert before listing your property on any short term letting website.
Before you list your spare room or condo unit on Airbnb or use the popular website to find accommodation, it’s important to understand what regulations exist throughout Southeast Asia. While Airbnb requires all users with a listing on the website to verify they are not in violation of any regulations, it’s always better to be safe than sorry. Here’s a brief overview of Airbnb in the region to help ensure you don’t break any rules you might not know about.
There are two areas of Thai law that need to be considered when it comes to short term letting, the Hotel Act and the Condo Act. Some believe that the terms of the Hotel Act aren’t very transparent when it comes to short term lettings. One argument is that short term lets are hotels operating illegally. But under the Hotel Act this is only applicable to anyone who has in excess of three units in a building. This then means if you are letting out one room via Airbnb you are within your rights under this law. Despite this, the act is regularly cited by condominiums to deter owners from renting out their property via the online marketplace even if it is false.
However, short term letting is not permitted in a building should it be clearly stated in the condominium’s own rules. These are covered in a comprehensive handbook that is provided with each unit. It is also usually written in Thai. Any new proposed terms needs to be raised within and agreed by over 50 percent of the building. Essentially the Condo Act means that any rules of a condominium are enforceable by law. Therefore if there is no mention of short term lettings in the rules, you are free to rent your room unit as you wish.
It’s important to note that the short term letting industry has been under fire in Thailand with some in the hotel industry very protective of their profits. Conscious of this, the government tried to crackdown on short term lettings in Phuket by advising property owners that they cannot let their property out for any period less than 30 days. The situation is a fluid one in Thailand and one you should monitor.
By May of 2017, the number of Ho Chi Minh City listings on Airbnb surpassed the 4000 mark while Hanoi has nearly 2,500 listings on the site. The latter city is also increasingly popular among those looking to rent a room with searches for Hanoi accommodations on Airbnb having risen by 261 percent in 2016.
It has also proven to be a success endeavour for short term letters. The internet is full of stories of property owners who have found success using Airbnb and eventually acquired more units to let. It fits in naturally with the country’s strong entrepreneurial spirit as many people in Vietnam have side projects to earn extra money.
In the case of Vietnam, no news is good news. While there have been some murmurings from hotels about short term letting websites, there has been nothing officially discussed about restricting them. It’s important to note that some buildings may have specific rules against the short term letting of a unit and you may be obliged to follow this.
Airbnb is recognised within Malaysia with the federal government having little interest in regulating this sector of property leasing, according to the Urban Wellbeing, Housing and Local Government Ministry. However, there have been some issues in the various areas of the country when it comes to short term letting.
Penang has taken a hard line towards Airbnb and similar services citing two laws: the Town and Country Planning Act of 1976 plus the Trades, Businesses and Industries By-Laws of 1991 by the Municipal Council of Penang Island. Any property in the state that is let on a short term is considered a hotel, serviced residences or lodging house. As such, they require approval from the local planning department in order to use the property in this way. Anyone not seeking this prior approval could receive summonses according to the Environmental Health and Licensing Department.
In Kuala Lumpur and other parts of Malaysia, it’s a much different story. There are no requirements for hosts to hold a license to let their property out as long as it is used solely for residential purposes. Each building may have rules that restrict lettings of a certain period of time in order not to disrupt other residents of the buildings and you will be required to follow these.
Listings on Airbnb continue to grow in the Philippines thanks to the booming real estate and tourism industry. The site remains the easiest way for foreigners to check out properties when they plan to visit the country. It’s also an amazing opportunity for Filipinos to earn some extra income, especially overseas foreign workers who may leave their house empty for weeks or months each year. Baguio, Tagaytay, Cebu and Davao are among the most viewed locations in the Philippines.
While there have been some minor complaints against Airbnb in the country, the service is perfectly lawful. Some users are not aware that Airbnb hosts do not offer hotel services leaving them a little confused while others have been disappointed because the property listed does not look like its pictures on the website.
In 2015, the Philippine Hotel Owners Association (PHOA) made a plea to the Department of Tourism (DOT) to create a regulatory legislation for websites like Airbnb. The association asserted the lack of laws for online rental services can put tourists in danger. Arturo P. Boncato Jr., DOT assistant secretary for Mindanao cited the Canadian Province of Quebec that has a law that required the same hotel taxes be put upon on Airbnb establishments. The association also mentioned that Airbnb establishments in the Philippines lack rules and decorum on dealing with guests that can lead to neglecting the needs of the customers. No action has been taken on these recommendations as of now.
Airbnb is popular in Singapore with approximately 7,000 listings. The service has proven to be a hit as it is estimated that hosts earn SGD 5,000 on average every year over an average duration of 45 nights. Unfortunately, things may be getting more difficult for those using the site.
In February, the government in Singapore passed a new law that directly influences Airbnb. The legislation states that properties cannot be let out for a term less than six months unless the owner has permission obtained from the Urban Redevelopment Authority (URA). This replaces the previous guidelines set out by the URA that suggest private homes should be not let out for a period of less than six months.
Additionally, properties can only be let out to six unrelated individuals at any one time. The figure was previously eight and this amendment could class some properties as dormitories that need approval from the URA to operate. The new law was passed as a result of the URA receiving 608 complaints regarding short term lettings in 2016. This is a hike of 61 percent from the previous year.
There is some good news as the URA are considering permitting short term rents for a whole new category of private home. This notion has only been discussed and hosts are advised to keep an eye on the news for any new developments that could influence how long they are permitted to rent their property out.
Elsewhere in Southeast Asia
In Indonesia, especially Bali, you can find a good number of listings on Airbnb. There have been some minor issues with short term letting in the country, but as of now there is nothing against doing it. That being said, it is important to stay up to date on the latest goings on as things can change quickly in the country.
Cambodia and Laos may not be the biggest markets for Airbnb, but the service remains popular for tourists visiting these countries. The laid-back nature of Laos makes Airbnb a natural fit, while the number of listings in Cambodia has risen recently. There are no laws or regulations banning short term letting in either country, but some buildings may not allow it.
Myanmar is the only country to have laws in place prohibiting short term letting. There are by-laws written in the country’s 1947 Immigration Act that stipulate foreign visitors on a tourist visa must stay in a hotel. Additionally, Minister for Hotels and Tourism, U Htay Aung, declared foreign visitors coming to Myanmar should not stay in private homes unless no other accommodation is available to them. While there are Myanmar listings on short term letting websites, both renters and stayers could face fines or other punishment if caught.