Local Accommodation
Local Accommodation
Alojamento Local changes
The new law (Lei no 62 /2018) of Alojamento Local (Holiday Rental licence, see afpop Bulletin H/13/E) was published in the August 22, in Diário da República, which will come into effect in October 2018. Here is information on some of the changes of this law, which gives more authority to municipalities and condominiums. Any Member who is operating an AL service, or who is considering doing so at some point in the future, should contact their local Câmara to ascertain the rules in their area.
Changes for the Municipalities (Câmaras Municipais)
Limited containment areas
CMs may impose limits on the number of establishments offered in certain geographical areas, in order to “preserve the social reality of neighbourhoods and places”. In addition, in these areas the same owner can only operate a maximum of seven local accommodation establishments.
Enhanced enforcement
ASAE (Food and Economic Security Authority) and the municipal councils are responsible for supervising compliance with the provisions of this Decree-Law, as well as announcing their respective processes and applying the respective fines and other sanctions.
Municipalities may oppose a registration
Local landlords will still have to make only a prior notification for the registration of new establishments in order to commence trading, but the local authorities may now oppose them on economic grounds and prevent the opening of new AL premises.
Changes for the owners
Mandatory multi-risk insurance
Local housing owners will be required to have a multi-risk insurance for damage that may be done in the common areas of a condominium, potentially being held liable for any damage caused by a guest.
Information book in several languages.
The owners must provide a document with all the rules of use of the building, as well as with all the rules concerning “waste disposal and noise levels”. Where there is a written regulation of the condominium this must also be included and given to the guests.
The document must also have the telephone contact of the person in charge of the operation of the establishment and be made available in Portuguese, English and “in at least two other foreign languages”.
Required to affix identification plates
From now on all homeowners, apartments and rooms that function as Alojamento Local must affix to an AL identification plaque at the entrance of the establishment.
In the case of hostels, the sign in question must be affixed outside the building, adjacent to the main entrance.
Fines increase
The Parliament also approved the increase in fines imposed on owners of Alojamento Local accommodation who operate illegally, in particular in cases where the accommodation is unregistered or who fail to comply with the obligation to update all data in the Balcão Único Eletrónico and any breach of the maximum capacity of the establishments.
The penalties will be punished with fines ranging from € 2,500 to € 4,000 for individuals and €25,000 to €40,000 for companies.
10 days to report end of activity
The owner of the Alojamento Local accommodation is also obliged to communicate, within 10 days, the cessation of the operation of the establishment through the Balcão Ùnico Eletrónico. The same deadline should be met for the reporting of closure to digital booking platforms such as Airbnb and Booking.com
Recognized “room” as AL
Another change is the recognition of the use of AL “rooms”, when the holding is made in the residence of the owner of the accommodation and that is their Fiscal residence. In this case it is only possible to have a maximum of three “units” in the property.
Changes for the condominium owners
The establishment of hostels depends on prior authorization
As with the Municipal Councils, condominiums also see their authority extended. Under the new law, the operation of new AL units becomes dependent on their prior authorization by the condominium. (At the time of printing there is no information about the process of applying to condominiums for AL approval).
Complaints may lead to the closure of accommodation
Translated: “Where the Alojamento Local accommodation is in an autonomous fraction of a building, the assembly of condominium owners, by decision of more than half of the owners of the building in a reasoned decision, resulting from repeated and proven practice that disturbs the normal use of the building, as well as causing discomfort and affecting the rest of the condominium owners, may oppose the exercising of the AL activity of the offending fraction, giving, for this purpose, knowledge of its decision to the president of the relevant Municipal Council.”
Contributions to the condominium
Condominiums will be able to fix the payment of an additional contribution by the owners of local accommodation units, “corresponding to the expenses arising from the increased use of the common parts, with a limit of 30% of the annual value of the respective quota.”
The new AL law provides for a two-year moratorium on existing establishments, which by 2020 requires mandatory implementation of all new rules.
What are the fundamental rules of the new law?
Before the change, legalization was done by mere prior communication [that an accommodation/registration was going to be “opened”] now it is done by what the law calls prior communication with a deadline
1. It is addressed to the president of the chamber
2. It is done at the Balcão Único Eletrônico
3. It is accompanied by several documents relating to the property (e.g. license to use), the person who will explore (identification, contact for emergencies, title to be able to explore) and the description of the place (apartment, house, accommodation, hostel)
4. In the case of a hostel, the communication must contain the minutes of the condominium owners' meeting.
u be, does al have to be authorized?
By default. If there is no opposition from the council within 20 days for hotels and within 10 days for other establishments, it is considered legalized and receives a registration number which acts as the legalization of the AL and it can open to the public.
However, the council still has the option to conduct an inspection within 30 days to verify legal requirements and, if there are any discrepancies, the registration can be canceled.
Does the new law also attempt to limit the existence of short-term rentals (AL)?
There will be what are known as containment areas that will allow municipalities to set limits on the opening of new short-term rentals. In these areas, quotas may be established based on percentage limits, in proportion to the available housing stock.
Note: The quantity is also limited. For example, owners who, at the time the new law comes into effect and the containment areas are created, already have more than seven units may keep them all, but they will be prohibited from opening new ones.
Is there a way for the license to expire?
Yes. This license becomes personal and non-transferable, so if there is any change in the holder, or in the case of companies, if the shares exceed 50% of the capital, the license expires. The only exception is in the case of succession due to death. This rule will apply to the modality of houses and apartments, excluding lodging establishments.
Are all AL owners now required to have insurance?
Yes. The AL owner is now required to have multi-risk civil liability insurance that protects their assets and covers claims, including fire risks and material and non-material damage caused to guests and third parties. The absence of valid insurance may lead to the cancellation of the AL registration.
Are there still rules missing within the law for hostels [missing an ordinance to regulate them]?
We had an article that defined what a hostel is, but it was revoked with the changes that were enacted. Everything regarding the description of the hostel in terms of the number of beds, size, spaces, windows, was revoked with the enactment of this law. Therefore, we are awaiting an ordinance that will define what a hostel actually is and its characteristics, in order to distinguish it from other types of accommodations.
Do the rules also change for buildings with condominiums?
Yes.
- A hostel can only exist with the authorization of the condominium owners.
- In other types of AL, if there is disturbance in the use of the property, such as causing inconvenience or affecting the rest of the condominium owners' rest, the condominium assembly, with a decision of more than half of the building's permillage, can oppose the AL operation and communicate this opposition to the mayor. The mayor decides, and if the registration is canceled, the activity may be suspended for up to one year.
- The person operating the AL is now required to provide their telephone contact to the condominium.
- If it is necessary to carry out works in common areas to obtain the AL license, it is the person operating the AL who must bear the respective cost.
- The condominium can establish the payment of an additional contribution corresponding to the expenses resulting from the increased use of common areas, with a limit of 30% of the annual value of the respective quota - approved without opposition by a two-thirds majority of the total value of the building.
Some people believe, for example, that they will be able to better defend themselves against noise?
This issue has always existed. With this new AL-specific law, it specifies that in condominiums, but we already have, in the general law, the possibility for people to defend themselves against disturbances that may be caused in the property. They can make a complaint to the police in any situation - it may or may not be effective - but to shut down an AL, they will have to take legal action. What is additionally provided by the new law is that condominium owners can inform the municipal council that they oppose the existence of an AL in that location, and the council can then close that AL because of the owners' opposition. Therefore, what is new is a relationship between condominium owners and the council to potentially trigger both the cancellation of the registration and the suspension of activity for up to a year.
AL must now be indicated by an identifying plaque at the entrance of the establishments. This rule applies to everyone, except for individual houses, including the room rental category.
