Service Suite vs Condo TPC – Law Q7

Q.

What is “service suite” if compared to “condominium”?

A.

Some answers are like:

Service Suite is of higher standard! It is used as “Hotel”! It is commercial use. It has commercial activity, etc.

In fact, service suite is just a strata product under “commercial land title”. Under National Land Code, land is divided into 3 categories of use.

  • Agricultural
  • Building
  • Industrial

Under building, it is subdivided into Residential and Commercial. When a plot of commercial land is used to build hotel, or for dwelling purposes, it is deemed commercial use. Of course, land for residential use is not allowed for commercial purpose. Commercial land can be Hotel as in an accommodation. So, this segment of market is naturally a evolution of needs in the market.

When a commercial land is built, it may have mixed commercial activities. It can be used as Hotel, Offices, Shopping Mall and Cinema. So, the part of hotel emerges to become service suite. People staying there becomes long term tenant. As it does not comply to residential measurement (plot ratio), the commercial suite only need to comply with some council requirements. These are like  public parking, public toilet, public hygiene etc, hence the parking becomes a limited commodity, as it may be owned by management, not by parcel owner themselves.

Being in the category of commercial development, service apartment is NOT regulated under Housing Development (Control & Licensing) Act, 1966. Hence, it does NOT need to have the equivalent stringent safeguards like the residential condos.

However, due to the safeguards the Schedule H of Housing Development (Control & Licensing) Act, 1966 (HDA 1966), some developers use SOHO to categorize Commercial Strata Living into "Residential within Commercial Title" making it look like "Residential HOME", to use Schedule H as a selling point.

In such context, the property although is commercial in title, however follows the HDA Sch H in dealings. This might encourage more buyers as they find the law being safeguards to their rights. Therefore, SOHO (Small Office Home Office) and SOVO (Small Office Versatile Office) are regulated also by HDA 1966.

  • https://estateagentexam.com/2018/05/condominium-vs-service-suite-any-difference.html/
  • https://www.propertyguru.com.my/property-news/2016/7/131267/chang-not-all-apartments-are-similar