This finding was made in two recent judgments handed down in a Plenary Session of the Supreme Court (Supreme Court Judgments 1232/2024 and 1233/2024 of 3 October 2024), in which it ruled for the first time on the interpretation and scope of Article 17.2 of the Spanish Subdivision of Property Act (Ley de Propiedad Horizontal, “LPH”), which was introduced in Royal Legislative Decree 7 of 1 March 2019, on emergency measures relating to housing and rentals. Based on this Article, the Court allowed Property Owners Associations to prohibit tourist rentals, an issue of unquestionable importance at the present time.
In both cases, the dispute had arisen from the decision by a Property Owners Association to prohibit the leasing of any property in their building for the purposes of tourism, a decision that had received a favourable vote from a majority of the Association’s members. This is provided for under Article 17.2 of the LPH, which establishes that the Owners Association may “restrict or place conditions on” the leasing of property for the purposes of tourism by adopting a resolution by a qualified three-fifths majority (of all the property owners, who must in turn represent three-fifths of the building’s ownership shares). This was, as one might expect, the subject of an appeal by several businesses that owned residential properties at the building in question and that were using these properties for business purposes.
Given the imprecise nature of the wording of the Article, the Property Owners Associations claimed that their power to impose restrictions or conditions upon owners included the potential prohibition of certain activities, an argument that was refuted by the affected businesses, which in turn believed that these rulings should be regarded as null and void, since, if one were to make a literal interpretation of the law, the meaning of the term “restrict” is different from that of “prohibit”.
The Supreme Court dealt with the main question, looking first at the meaning of the verb “to restrict” as it is defined by the Royal Spanish Academy, which establishes that while one usage means “to place limits on something”, another refers to “establishing the extent of someone’s authority, rights or powers”, which led it to conclude, according to the Court’s own interpretation, that this term could also include prohibition.
The Court also stressed that, under the terms of Article 3.1 of the Spanish Civil Code, the law should be interpreted in accordance with its spirit and intended aims, that is to say “why” it was enacted and “for what reason”. In this regard, if we examine the preamble to Royal Legislative Decree 7 of 1 March 2019, we can see that the Act sprang from an initiative to take certain measures to tackle the difficulties faced by the general public in finding rental accommodation while at the same time attempting to slow the widespread increase in rental prices, problems for which tourist rentals are seen as the main cause. This was seen by the Court as sufficient justification to find that the lawmakers would favour including prohibition among the owners’ powers of restriction, and thus increase the number of properties available for residential rental.
The Civil Division believed that there should be a balance between private interests and the interests of the Community in general, and it was furthermore aware of the harm that these types of rentals may cause to co-existence among residents, particularly in areas with a larger tourist presence, where the leisure activities that are generally pursued by the people who rent out these properties come into direct conflict with the peace and quiet of the building’s other residents.
Given all of this, the Court found that the rights of owners may be subject to certain restrictions and limitations, such as the prohibition of certain activities, among them changing a property from residential housing to use for tourist rentals, so long as this is set out in a resolution adopted in accordance with the law, in which the required majority is respected. The resolution must also be recorded in writing and registered at the Land Registry in order to take effect vis-à-vis third parties.
Conclusion
Both the legislation in force and the Supreme Court have provided owners with a legal basis for tackling breaches of the rules governing peaceful co-existence, along with the other problems that have arisen in certain areas as the result of properties being used in this way (e.g. lack of security, noise, rubbish). These latest rulings represent a significant step forward in the regulation of tourist rentals, providing Property Owners Associations with the power to call a meeting and decide, by the required majority, whether they wish to allow or prevent this type of activity within their building.
Conclusión
Tanto la legislación vigente como el Tribunal Supremo ha otorgado a los propietarios una vía legal para poder hacer frente a los incumplimientos de las normas de convivencia y otros perjuicios que se están generando en ciertas áreas, a consecuencia de este tipo de viviendas (inseguridad, ruido, residuos etc.). Así, estas nuevas resoluciones implican un gran avance en la regulación de los alquileres turísticos, proporcionando a las Comunidades de Propietarios la facultad de promover una Junta y, mediante las mayorías establecidas, decidir si se permiten o prohíben este tipo de actividades en el edificio.
