New Regulation for Holiday Rentals within Communities of Property Owners

Holiday rentals in Spain have suffered a new legal modification, applicable since 6^th of March 2019, this time within the context of Communities of Property Owners, regulated by the Horizontal Property Law.

Pursuant to this modification, a majority of three/fifths (60%) of owners (and shares) will be enough to approve measures in order to “limit and condition” the holiday rentals within the community, as explained in article 17.12 of Horizontal Property Law, that now reads as follows: ‘The agreement that limits or conditions the exercise of the activity referred to in letter e) of article 5 of Law 29/1994, of November 24th, on Urban Leases, in the terms established in the tourism sector regulations, whether or not modifying the constitutive title or bylaws, will require the favourable vote of three-fifths of the total of the owners who must also represent 3/5 of the participation fees. Likewise, this same majority will be required for the agreement establishing special maintenance fees or an increase in the share of the common expenses of the property where said activity is carried out, as long as these modifications do not imply an increase of more than 20% . These agreements will not have retroactive effects.”

It is important to point out that the possible prohibition will not affect those properties that were already being rented out as holiday homes, and with the appropriate license in place at the moment the agreement is adopted. However, owners of such properties will be affected by a possible increase in their community fees, by up to 20%, without retroactive effects. Also, this does not affect long term rentals.

A common question regarding the 20% surcharge on community fees is whether the community must justify this increase by proving that short-term rentals lead to higher maintenance costs. The short answer is no. While it would certainly be more transparent and democratic to discuss the reasons for the surcharge in a general meeting, explaining why an increase is being proposed, it is not a legal requirement. The community, with the necessary majority vote, can decide to increase the fees for properties used for holiday rentals by up to 20% without needing to provide any justification.
Another frequent question is what happens if the property is only rented out for a few months or weeks rather than the entire year. At least in Andalucía, the answer is straightforward. Here, property owners are legally required to notify the authorities of the specific periods when their property will be available for holiday rentals. If you provide a copy of this notification to the community administrators, you should be exempt from paying the surcharge for the months when the property is not available for short-term letting.

UPDATE OCTOBER 2024: The Supreme Court has ruled that a community of property owners can PROHIBIT holiday rentals if approved by a vote of at least three-fifths of the total owners, who must also represent three-fifths of the ownership shares (participation quotas).

UPDATE FEBRUARY 2025: After the last modification of the Horizontal Property Law, if you apply for the licence after 3rd April 2025, you will need to provide specific authorisation from the community to register your property as a holiday home.

So, summarising:

Communities of Property Owners can prohibit new holiday homes with a majority of three fifths.
Communities of Property Owners can increase the fees for those properties by up to 20% with the same majority, even if they already existed as such before the agreement is taken.
Communities of owners cannot stop holiday rentals in apartments that were already carrying out this activity, and registered accordingly, before the agreement is taken.
After 3rd April 2025, you will need to provide specific authorisation from the community to register your property as a holiday home.

Since this new law came into force, many Communities of Property Owners have included an item on their AGMs or EGM’s agenda, in order to reach agreements on this. If you own a holiday home, and you have heard that your community is going to take a vote on this, we advise you to hire a lawyer to make sure that any negative impact for you is reduced to the minimum possible. Of course, at Bravo Legal we would be happy to assist with this. Please get in touch with us and we will provide you with more information.