The Spanish co-ownership law provides for the ability of the co-owners' association or urbanisation to restrict, or as the legislation states, 'condition' holiday rentals. This article answers some common questions about the restriction of holiday rentals by the co-owners' association.
What is holiday rental?
Holiday rentals are regulated at the level of the autonomous region. Spain has 17 autonomous regions, each with its own regulations for holiday rentals. Broadly speaking, letting a furnished & equipped property on a regular basis for periods shorter than 2 months using promotional channels is considered holiday letting.
Read more about holiday rentals in Spain or follow Our training on holiday rentals in the Costa Blanca.
What do we mean by 'limit'?
The regulations mention 'conditioning' or restricting. Although the legislation says nothing about 'prohibiting', Spanish case-law interprets 'conditioning' broadly, including the ability to 'prohibit'. This allows the co-owners' association, provided it follows the correct procedure, to prohibit holiday rentals or impose other restrictions.
Who decides on a restriction on holiday rentals?
The general meeting of co-owners may decide by a 3/5 majority of the votes present or represented to impose a restriction or prohibition of holiday rentals, provided that this majority also represents 3/5 of the quotas. Also, the general meeting may, by the same majority, increase the ordinary contributions of registered holiday homes (homes with a rental licence) by up to 20%.
Read more about the organisation of the co-owners' association.
When does the decision become enforceable?
The decision of the co-owners' association to prohibit or restrict holiday rentals must be registered in the property register. Specifically, either the basic deed or the bylaws will therefore be filed for registration with the property register. From the moment the registration is completed, the decision is enforceable against third parties, e.g. future owners.
What about existing holiday homes?
A decision by the co-owners' association has no retroactive effect. This means that properties with rental licences before the decision are not impacted by any restriction or ban.
Are there other ways within the co-owners' association to stop holiday rentals?
Yes. According to recent case law, holiday rentals are considered an economic activity. If the basic deed or bylaws prohibit an economic activity within the complex or within the urbanisation, holiday rentals must be discontinued, regardless of whether you have a previous rental licence. In the past, the prohibition of an economic activity was often already included when the association of co-owners was established.
Learn more about the prohibition of an economic activity within a co-owners' association here.
