Property-owner communities can ban tourist rentals, says Spain's Supreme Court
Published on 22nd Nov 2024
A Horizontal Property Law ban requires approval by three-fifths of owners with three-fifths of the participation quotas
Access to housing in Spain has become a major concern, leading political groups to explore various intervention strategies for the residential rental market. In recent years, the rise of tourist rentals has increasingly impacted the country, with specific neighbourhoods in many cities feeling the effects the most. This trend has led to disturbances and discomfort for residents.
Regulating tourist rentals involves more than just oversight from public authorities; property-owner communities can also establish agreements to prohibit such activities. This raises a question: What kind of majority is needed for these agreements to be valid?
Horizontal property
Royal Decree-Law 7/2019 has modified Article 17.12 of Law 49/1960, dated 21 July, which pertains to horizontal property. This amendment changes the usual requirement for unanimous agreement when modifying the articles of association within a property-owner community. As a result, any decision imposing limitations or conditions on tourist rental activities will now only require the backing of three-fifths of the total owners, who must also account for three-fifths of the participation quotas.
The Directorate General for Legal Certainty and Public Faith issued Resolution No. 2893/2023 on 21 December, reaffirming its earlier interpretation of the law. This resolution clarified that the provision's term "limiting" does not bar certain activities' prohibition. However, the courts have interpreted this provision differently.
On 3 October, in rulings 1232/2024 and 1233/2024, the Supreme Court tackled this matter by setting a clear interpretative standard. In line with Article 17.12 of the Horizontal Property Law, property-owner communities are permitted to adopt a resolution that entirely bans tourist rental activities in a dwelling, provided it receives the approval of a double majority, specifically three-fifths of the votes.
No constitutional obstacles
Several arguments support this conclusion. First, based on the interpretation of Article 33 of the Spanish Constitution, there are no constitutional obstacles. The limitations on activities related to private property have already been recognised as consistent with the constitution. Additionally, restricting the use of properties for tourist rentals "does not change the fundamental essence of the property right."
By utilising the traditional interpretative criteria described in Article 3.1 of the Civil Code, the Supreme Court goes beyond mere grammatical analysis. It aims to explore the underlying reasons and objectives behind the rule's enactment, adopting a teleological approach to interpretation.
Semantic and teleological interpretation
Regarding semantic criteria, the court noted that the law encompasses two separate scenarios: "condition," which suggests a lesser degree of intensity, and "limit," which covers a broader range. Nothing prevents a limitation on an activity from extending to the point of a total prohibition.
The court cited the Real Academia de la Lengua dictionary and the Diccionario Panhispánico del Español Jurídico to substantiate its interpretation. Furthermore, it contends that it would be illogical for the legislature to use the terms "limit" and "condition" interchangeably if they did not intend "to broaden the possibilities outlined in Article 17.12 of the Horizontal Property Law."
In its teleological interpretation, the Supreme Court refers to the preamble of Royal Decree-Law 7/2019, concluding that the regulation's spirit and intent support the idea that the limitation encompasses a prohibition. This indicates that the legislature aims to prioritise residential renting over tourist renting. As a result, imposing conditions or restrictions on tourist rentals does not adequately tackle the issue of housing access.
Supreme Court observations
The court made two critical observations. First, it recognises the potential nuisance and harm from tourist rental activities. Second, the requirement for a unanimous agreement to prohibit such activities could create challenges, as the property owner could always vote against it. This situation might lead to the property-owner communities imposing conditions that could render tourist rentals impractical, increasing the chances of legal disputes.
Osborne Clarke comment
In conclusion, the above judgments favour property-owner communities over the private interests of individual owners. While these rulings provide a legal framework, how frequently these communities will prohibit tourist rentals remains to be seen. Additionally, given that this is a controversial issue with the potential for social conflict, it will be essential to keep an eye on political initiatives related to this matter.
