Bans on tourist rentals in Spanish condominiums

The Royal Decree-law 7/2019, of 1 March, on urgent housing and rental measures, introduced in Law 49/1960, of 21 July, on horizontal property an exception to the general rule of unanimity for amending the bylaws of a condominium of owners.

The Directorate-General for Legal Certainty and Public Trust (Dirección General de Seguridad Jurídica y Fe Pública) has issued several rulings on the applicability of this exception to cases that ban the activity of renting out tourist accommodation.

In addition to the rules that must be followed for resolutions that prohibit tourist rentals to be valid, the courts have also expressed their opinions on the effects of such resolutions and what kind of authorisation in the bylaws is required to pass them.

Regulation of rentals for tourist use

By the end of 2023, there were more temporary rentals in Spain compared to the end of 2022 and 2021. However, these rentals were not regulated by Law 12/2023, of 24 May, on the right to housing. Furthermore, the number of tourist accommodations, which could be considered a form of temporary rental, has increased significantly in recent years.

Under Spanish Law 29/1994, of 24 November, which regulates urban leases, rentals for tourist use are exempt from it as long as they are governed by specific sectoral tourism regulations. These regulations are approved by each autonomous community, which has the freedom to set the criteria and requirements that these accommodations must meet.

A condominium of owners can not only regulate tourist rentals, but also prohibit them, even if the rentals comply with the regulations established by the autonomous community. To do so, the owners' meeting of a condominium can pass a resolution to prohibit this activity altogether.

The exception provided for in the Law on horizontal property

According to Article 17.12 of Law 49/1960, of 21 July, on horizontal property, any resolutions that impose limitations or conditions on tourist accommodation activity require a favourable vote from three-fifths of the total number of owners, representing three-fifths of the participation quotas. This applies regardless of whether the resolution changes the constitutive title of the condominium of owners or the bylaws.

This is an exception to the rule set out in Article 17.6 of the Law on Horizontal Property, which typically requires a unanimous vote from all unit owners to modify the constitutive title of the horizontal property or the bylaws of the condominium of owners.

The law allows an exception for a specific type of activity. This exception is related to tourist accommodation, defined in Article 5.d) of the Urban Leases Law. This definition should be understood in accordance with the relevant tourism regulations.

The Directorate-General for Legal Certainty and Public Trust has clarified that Article 17.12 of the Law on Horizontal Property only applies to tourist rentals within the applicable sectoral regulations and the rules established by urban and territorial planning instruments. It does not apply to other residential uses, such as mere holiday rentals not subject to the applicable sectoral regulations.

Interpretation of the exception

In resolution no. 2893/2023 of 21 December by the Directorate-General for Legal Certainty and Public Trust, the registrar, who rejected registration of an amendment to the bylaws, believed that Article 17.12 of the Law on Horizontal Property should be interpreted restrictively as it is an exceptional case. Therefore, according to this registrar, unanimity was required when prohibiting the activity of apartments for tourist use.

Royal Decree-law 7/2019, of 1 March, on urgent housing and rental measures introduced section 12 into article 17 of the Law on Horizontal Property. This section 12 only speaks of limiting or conditioning, not of a total prohibition.

However, the Directorate-General of Legal Certainty and Public Trust does not believe that the explicit mention of the rule to "limiting" prevents the prohibition of an activity. In fact, in its resolution no. 2893/2023 of 21 December 2023, the Directorate-General reiterated its previous interpretation of this provision. Therefore, to validly pass a resolution that prohibits the activity of apartment or dwelling for tourist use, the favourable vote from three-fifths of the total number of owners, representing three-fifths of the participation quotas, will be sufficient.

Effects of the prohibition resolution

Concerns may be raised about the impact of a prohibitive resolution on co-owners who had already obtained a licence to initiate the activity of apartments or dwellings for tourist use at the time of the resolution's adoption.

The High Court of Justice of Catalonia, in its judgment 74/2018 of 13 September, established that a restriction of use can only be imposed with the approval of four-fifths of the owners with voting rights, who must also represent four-fifths of the participation quotas. However, this cannot affect dissenting owners who already had a licence to use their properties for tourist use when the resolution was adopted.

The Directorate-General of Law, Legal Entities, and Mediation of Catalonia, noted that the usage restriction approved with the required qualified majority is eligible for registration. However, under the general principle of non-retroactivity of regulations that limit rights, this resolution will not affect current owners who have not given consent. If the restriction is already registered, it will affect future property purchasers.

Express or generic prohibition in the bylaws

All this pertains to resolutions that explicitly forbid the activity of apartments for tourist use via the bylaws. However, some bylaws only contain a general provision that prohibits the use of properties for any commercial, economic, professional, or business activity. In such cases, the Supreme Court has upheld the condominium of owners' ban on tourist apartments based on this type of provision in the bylaws.

In its judgment 1671/2023, on 29 November, the Supreme Court observed the existence of an economic activity prohibited by the bylaws, equivalent to those economic activities actually listed in the bylaws, without this conclusion being in conflict with case law establishing that restrictions must be clear, precise and explicit. Additionally, the court noted that renting out apartments, which is not prohibited despite being an economic activity, cannot be equated with renting out tourist apartments.