Local Accommodation – Changes to the Legal Regime in Portugal

Within the scope of the new housing policy, Decree-Law n. º 76/2024, October 23, introduces changes to the Legal Regime for the Operation of Local Accommodation Establishments. These changes came into force on November 1st of 2024. In the terms referred to therein, this Decree-Law aims to create conditions for the local accommodation activity to be consolidated in a balanced way with the housing environment, reconciling the economic and urban impacts of the activity in Portugal.

According to the law, Local Accommodation establishments are those who provide temporary accommodation services, particularly for tourists.

The new changes can be divided into 4 pillars:

 

1. General changes

Maximum capacity of the establishment

The maximum capacity of local accommodation establishments is now 9 (nine) rooms and 27 (twenty-seven) users (which is a reduction from the current 30 users), except for the modalities of hostel and rooms.

Convertible and/or additional beds may be installed, if they do not exceed 50% of the fixed beds.

Insurance

It is the responsibility of the owner of the operation to cover the risks provided for in this statute and in Ordinance n. º 248/2021, of 29th of June, which are inherent to the operation of a local accommodation establishment.

Whenever it deems it convenient, the municipality may require documentary proof of the insurance contract, and the owner of the operation must provide it within a maximum period of three days, under penalty of cancellation of the registration.

 

2. Registration of local accommodation activity

Registration of Activity

As a necessary and mandatory condition for the opening of a local accommodation operation, the owner must register the activity of the local accommodation establishment online at the "Entrepreneur's Desk" on the gov.pt website.

After the registration of the activity, the owner of the operation must send a prior communication with a deadline to the City Council, which must include: (i) authorization to use the property, (ii) the identification of the owner of the operation, (iii) the address of the owner of the operation, (iv) the name adopted by the establishment and its address, (v) the capacity of the establishment, (vi) the intended date of opening to the public and (vii) the details of the person to be contacted in the event of an emergency.

The communication must be accompanied by (a) a simple copy of the owner´s identification document or indication of the access code to the permanent commercial registration certificate of the legal person, (b) a term of responsibility signed by the owner ensuring the suitability of the building or unit for the accommodation activity, (c) a simple copy of the urban land registry referring to the property in question, (d) a simple copy of the lease agreement or other legal instrument that legitimizes the holder to carry out the activity, (e) a simple copy of the declaration of commencement or change of activity submitted to the Tax and Customs Authority and (f) the modality of establishment.

In addition to the documents mentioned, in the case of a hostel, minutes of the condominium meeting authorizing the installation is also required, when they are located in buildings subject to the horizontal property regime.

After the submission of the prior communication with a deadline, if there is no opposition from the City Council within the legally defined period (60 days after submission of the prior communication and in the case of a containment zone, 90 days after presentation of the prior communication), the document containing the registration number of the establishment is issued, which constituted a valid title of opening to the public.

The indication of the registration number is mandatory in the advertising, commercial documentation and merchandising of establishments, and electronic platforms that provide, advertise or sell accommodation are also required to display this number.

City Council`s opposition to registration

The City Council may oppose the prior communication with deadline within 60 days after the submission of prior communication (previously this period was 10 days). For properties located in containment zones, this period becomes 90 days.

The City Council opposition to prior communication may be based on the following:

1. In the incorrect instruction of the prior communication with a deadline;
2. If, after a decision of the City Council to cancel the registration and during the period defined in the cancellation of the registration, a new prior communication is sent;
3. In violation of the restrictions of installation decided by the municipality or in the absence of authorization for the proper use of the building;
4. Non-compliance with the applicable legislation (this is a new ground for opposition inserted by this new Decree-Law).

The applicant may request, on a one-off basis, that an inspection be carried out by the competent municipal services, with a view to revising the decision of opposition, provided that the costs of carrying it out are borne by the applicant.

Eliminated the deadline and renewal of registrations

As of November 1, 2024, with the revocation of article 6-A of the Legal Regime for the Operation of Local Accommodation Establishments, registration is no longer subject to a time limit (previously it was subject to a maximum period of 5 years), so there is no longer a renewal of registrations.

Revocation of the suspension of the issuance of registrations

With the repeal of the rule that determined the suspension of the issuance of new registrations, as of November 1, 2024, local accommodation registrations can be issued in the modalities of apartments and hospitality establishments.

Transmissibility

With the entry into force of this diploma, there is now the possibility of transferring the registration number of local accommodation, repealing the rules of the license being tied to the applicant and non-transferability that were imposed by the previous legislation, as well as the rules of expiry of the license in the case of transfer of ownership of the operation and in the case of transfer of any part of the share capital of the legal person holding the registration.

Non-transferability may, however, be determined by the municipalities for properties located in containment areas, without affecting the cases of: i) Succession; ii) Free transfer of the local accommodation unit to a spouse or de facto partner, descendants or ascendants; iii) Divorce, legal separation of persons and property or dissolution of de facto union.

 

3. Changes to the powers and competences of municipalities

Cancellation of registrations

The City Council may determine, preceded by a prior hearing, the cancellation of the registration of the respective establishment in the following cases:

1. When there is any non-conformity with the information or document contained in the registration;
2. In the case of installation of new local accommodation in violation of established containment areas;
3. If there is no valid mandatory insurance or failure to send information and proof;
4. For violation of the requirements established in articles 11 to 17 of the Legal Regime for the Operation of Local Accommodation Establishments, which refers to the violation of the requirements relating to the maximum capacity of local accommodation, the conditions and characteristics of the facilities, safety requirements, violation of the rules for containment and sustainable growth areas and violation of the rules of identification and advertising of the establishment;
5. When there is a repeated and proven practice of acts that disturb the normal use of the building, in cases where the procedure is not archived through the acceptance of commitments and conditions;
6. In containment areas, when it is found that in the local accommodation modality where the establishment was installed, urban lease agreements for permanent housing were entered into in the two years prior to the submission of the request with a deadline, in violation of the applicable municipal regulations.

The grounds referred to in 4. 5. and 6. are innovations of this new Decree-Law.

Regulatory power in the field of local accommodation

Municipalities can approve a local accommodation regulation, defining the location of containment areas or areas of sustainable growth, through which they can limit the number of new registrations of local accommodation - exclusive power for containment areas - or they can create special measures to monitor and monitor this activity, to prevent overload of local accommodation.

If the municipality reaches 1,000 local accommodation establishments, the municipal assembly has a period of 12 months to decide whether it intends to exercise this regulatory power. If the municipality has already reached 1,000 establishments, the 12-month period begins from the date of entry into force of this diploma, so it will remain until 31.10.2025.

Through municipal regulation, the local accommodation ombudsman can be created, to assist the municipality in the management of disputes that may arise.

Determination of valid and compatible uses with local accommodation

The valid and permitted uses with the local accommodation activity will be defined in municipal regulations. In the absence of a forecast, it will be up to the city council to define. The municipal regulation must comply with the following mandatory rules:

1. In the 'rooms' modality, only residential use is allowed;
2. In the modalities of 'residence' and 'apartment', the admissibility of non-residential use depends on compliance with certain requirements established in Decree-Law no. 76/2024;
3. In the 'hospitality establishments' modality, including those that use the name hostels, the city council may provide for different uses of housing depending on the type of accommodation and the capacity of the establishment.

Containment areas and areas of sustainable growth

In addition to containment areas, municipalities can also define and approve areas of sustainable growth, applying limitations that prevent overload situations with undesirable effects.

The limitation of operations to seven local accommodation establishments for each owner in containment areas was eliminated.

Municipalities have powers:

• In containment areas:
1. To subject new registrations to certain conditions and limits;
2. Create limits to the transmissibility of new registration numbers, in the modalities of house and apartment, apart for the exceptions provided for in which it is not admissible to regulate the municipality.
• In the areas of sustainable growth:
1. Determine whether the average or higher state of conservation is a requirement for the installation of new local accommodation establishments;
2. Determine whether the energy efficiency level equal to or greater than "D" is a requirement for the installation of new local accommodation establishments;

 

4. Changes to the powers of condominiums

Need for prior authorization from the condominium

The prior authorization of the condominium for the registration of the local accommodation establishment in a unit of a building in horizontal property was revoked.

The prior need for authorization from the condominium remains in the case of hostels in buildings where it coexists with housing.

Inadmissibility of giving different use to the unit of the purpose for which it is intended

Pursuant to article 1422/n. º2 of the Civil Code, it is especially forbidden for the owners to use the unit for other than the purpose for which the units are intended.

For several years, it was debated in Portuguese jurisprudence whether changing the use of the unit of "housing" to a use of "local accommodation" consisted of giving it a different use from the purpose for which it is intended. The new law resolves this issue, by stipulating that "the installation and operation of local accommodation establishments in a unit does not constitute a use other than the purpose for which it is intended, under the terms and for the purposes of the provisions of Article 1422/n. º2 al. c) of the Civil Code" (Article 6 - B/paragraph 4).

Prohibition of the activity of local accommodation in constitution title

The activity of local accommodation may be prohibited in the constitutive title of the horizontal property, in a condominium regulation that is an integral part of it or through a subsequent resolution of the condominium to be approved by a representative majority of two-thirds of the permillage.

This prohibition only applies to applications for registration submitted after the resolution, and therefore does not affect pending applications for registration.

Changes in the condominium's powers in the cancellation of registration

The way in which the owners can cancel existing registrations on the property has been changed and limited.

The condominium owners can still request, with the City Council, the cancellation of registration. However:

• The resolution must be adopted by a simple majority of the building's permillage (and not two-thirds, as was previously foreseen);
• The resolution must be substantiated and prove that repeated practice of acts that disturb the normal use of the building and cause inconvenience (a deliberation without justification is not enough, as previously provided);
• The request is subject to the decision of the City Council, which may cancel the registration or invite the parties to reach an agreement (this procedure must be completed within a maximum period of 60 days);
• With the cancellation of the registration, the operation of the establishment ceases for the period set in the decision, which may not exceed 5 years;