The legal framework: Ley de Propiedad Horizontal and 2019 reform

For years, uncertainty existed regarding the actual capacity of owners' meetings to limit tourist activity in their properties. The situation changed decisively following the entry into force of Royal Decree-Law 7/2019, on urgent measures for housing and rent. This law amended the Ley de Propiedad Horizontal (LPH) and introduced Article 17.12, granting clear legal tools to residents.

The legal text establishes that an agreement to limit or condition the exercise of holiday rental activity requires the favourable vote of three-fifths of all owners who, in turn, represent three-fifths of the participation quotas. In recent judicial rulings, the Supreme Court has clarified that the term to limit or condition explicitly encompasses the possibility of agreeing to a total prohibition of the activity in the property.

Requirements and majorities to pass the agreement at a meeting

For the decision of the community to ban tourist flats to be fully legal and binding, strict formalities must be met during the owners' meeting:

• Formal inclusion on the agenda: The item to be discussed must be clearly and explicitly stated in the formal notice convening the ordinary or extraordinary meeting.
• Double three-fifths majority: Approval is required from at least 60% of all property owners and 60% of the participation quotas of the building.
• Counting absent owners' votes: Duly summoned owners who do not attend the meeting have a period of 30 calendar days from notification of the minutes to register their disagreement. If they do not communicate their refusal within this period, their vote is added to the decision of the majority.

Non-retroactivity: What happens to existing tourist properties?

A fundamental aspect of the regulations is the principle of non-retroactivity. Passing a community agreement to veto holiday rentals does not affect properties that already had a legal tourist licence before the date of the agreement and were actively operating.

However, owners of tourist properties with prior licences must respect the general community rules of the building. The owners' association retains the power to take legal action through a cessation order (acción de cesación), regulated in Article 7.2 of the LPH, if the activity causes verifiable unhealthy, harmful, dangerous or illegal nuisances.

Importance of registration in the Land Registry

For the prohibition agreed by the meeting to be effective against future property buyers in the building, it is essential to amend the community bylaws and register the agreement in the Land Registry (Registro de la Propiedad).

If the rule is not registered in the public registry, a new buyer purchasing a flat in the building will not be obliged to comply with the prohibition, as this encumbrance will not appear in the registry entry of the property at the time of purchase.

Other measures: Surcharge on service charges

In addition to the option of vetoing new holiday properties, the Ley de Propiedad Horizontal allows for economic measures. With the same qualified majority of three-fifths of owners and quotas, the meeting can agree to increase the contribution to the common expenses of the property where the activity takes place.

This increase in the community fee has a legal limit set by law: it cannot exceed 20% of the ordinary fee allocated to the property. Unlike the ban on new openings, this financial surcharge can be applied to tourist flats that were operating prior to the agreement.

Town planning regulations and Officially Protected Housing (VPO)

Apart from the decisions of the owners' meeting, regional and municipal planning regulations determine the conditions of use for a property. For example, within the Comunidad de Madrid, regulations require compliance with specific planning requirements, such as independent access or tertiary use licences depending on the area.

In the specific case of the Comunidad de Madrid, Officially Protected Housing (VPO) and properties with any form of public protection are expressly prohibited from being used as holiday rentals. These properties must be used exclusively as the habitual and permanent residence of their awardees or owners.

Considerations before buying a property

Before purchasing a property with the intention of using it for holiday rentals, it is a priority to check the building's bylaws and request an official registry extract (nota simple) to verify whether any prohibition is registered.

If you plan to purchase a property for investment or residence and wish to analyse financing options in the current market, you can consult mortgage credit intermediaries to assess the financial viability of the transaction taking into account the regulatory features of the property.