New Regulation for Holiday Rentals within Communities of Property Owners
Holiday rentals in Spain have suffered a new legal modification, applicable since 6th 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.
As normal in Spain, with every new law, there are some doubts about its application, which unfortunately will not be sorted out until the first judicial decisions are taken. For example, some believe that the Community of property of owners can’t ban holiday rentals because the law only refers to “limit and condition”. According to the sector that advocates for this interpretation, the community would have the power to set up conditions limiting the numbers of weeks an apartment can be rented out, the number of guests, asking for security deposits to cover possible damages, etc. However, the general understanding is that prohibiting NEW holiday apartments within a community, is a way to limit this activity and not a general prohibition.
UPDATE MAY 2022: Some Courts have alreay ruled that Communities cannot agree a total prohibition of new holiday homes, as the law only mention the posibility to “limit and condition”.
- Communities of Property Owners can prohibit new holiday homes with a majority of three fifths (at least, in theory, because we have started to see the frist court decisions against this)
- 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.
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.