Amendments to the Portuguese Touristic Rental License Law - Alojamento Local (AL)

Since the introduction of the initial legislation on touristic rental – Alojamento Local (AL) which authorised activity in unlimited housing units, the President of the Republic has now approved a new set of laws with significant changes.

Marcelo Rebelo de Sousa comments that this legislation may have some "questionable solutions that may be difficult to combine with some legal aspects," however, it is affecting residents that live in historic areas, so it is "urgent to control excesses": the reduction of houses available for permanent lease, increasing of rental prices, and forced eviction of tenants.

This diploma will give more power to local municipalities and to condominiums, as well as more supervision:

Local authorities may establish areas with limits of Alojamento Local

To avoid excess units of AL and to counteract the limited supply of housing for residents, City Councils can create containment areas with a fixed level of "percentage limits in proportion to housing available", to be re-evaluated every two years. If an owner wishes to open an AL in one of these areas, they will be limited to 7 units. This measure only applies to those which are established after the new law comes into force.

Local authorities may cancel licenses, inspect and sanction establishments

An authorisation addressed to the Mayor is required, with the "minutes of the condominium owners’ assembly, in the case of hostels". The President may refuse the license, based on an inspection that must be done "within 30 days" of the communication, to verify compliance with the established requirements.

If there is no conformity between the information and the registration (which has become personal and non-transferable), the unit will be closed by the City Council. As well as where there is "failure to comply ... which jeopardizes user safety or public health".

Condominium with reinforced powers

The condominiums may oppose the practice of AL in a property, provided that the opposition is well founded, the decision being dependent on the approval of more than half of the building share: "repeated and proven practice of acts that disturb the normal use of the building, which cause discomfort and affect the rest of the condominium owners. "It will be, however, the municipality that will have the last word in the cancellation which, if approved, will prevent the exercise of AL during a semester, regardless of the exploring entity.

Housing units that are merely rooms can also now exist within the condominiums.

As already mentioned, the approval of the condominium is mandatory to open a hostel in coexistence with housing residents: "it is not possible to install and operate hostels in buildings where housing coexists without the permission of the condominiums".

Additional contribution payment

Condominiums can set an additional fee of up to 30% over the normal annual instalments. This amount is intended for recurring expenses due to increased use of the common areas of the building. This amount should be approved, without objection, by a two-third majority of the condominium.

The obligation of multi-risk insurance

In view of possible property damage caused to both guests and third parties, as well as protection of the common areas of the building, the AL owner is required to take out extra liability insurance.

Mandatory information book in multiple languages

The AL units are obliged to "have a book regarding the operation of the establishment, on the collection and selection of municipal waste and on the operation of appliances ", amongst others. This book should be in Portuguese, English and at least two other languages.

Plates at the front door for all apartments and rooms

It is now compulsory to place identification plates at the entrance of the lodging establishment for this activity, except for villas.

Therefore, the President approves limitations and new obligations to those who intend to carry out Alojamento Local. There are many, such as the ALEP (Local Accommodation Association in Portugal), who disapprove of these laws because they consider them to contain "a series of inconsistencies, errors and even legal conflicts." Others point out that one has to continue investing "in an activity on which 33,000 families and many thousands of micro-enterprises depend" - AHRESP (Portugal Association of Hospitality, Catering and Accommodation). At Casas do Barlavento, we are looking forward to the publishing of the laws in the Diário da República (Official Gazette), but we alert you to the fact that only establishments registered after the new law comes into force will need to comply with the laws.

Regarding existing AL license holders note that have an adjustment period of two years, i.e., until October 2020 to comply with the new regulations.