This question arises from a 2019 decree law that had different interpretations. The issue has been resolved by the Supreme Court in two rulings dated October 3, 2024, of which we highlight, The reform of the Horizontal Property Law represents a significant change in the regulation of tourist rentals within homeowners’ associations. As of April 3, 2025 :
- Homeowners’ associations may prohibit tourist rental activities through agreements adopted at a meeting by three-fifths of the total number of owners representing three-fifths of the participation shares (Article 17.12 of the LPH).
- The Supreme Court interprets the expression “limit or condition” contained in Article 17.12 of the LPH with the provisions of Article 3.1 of the Civil Code. It rejects the idea that this is a case of interpreting a statutory provision under restrictive conditions and concludes that, based on grammatical, semantic, and literal criteria, the term “limit” does not exclude the prohibition.
What this means:
Does the agreement limiting or prohibiting tourist use have retroactive effect?
The agreement adopted by the Owners’ Association limiting tourist rentals does not have retroactive effect and will only bind, after the community agreement is adopted, owners who wish to use their homes for this activity in the future. Any homeowner who is renting out properties for tourism purposes prior to April 3, 2025, may continue to do so under the conditions and deadlines established in the tourism sector regulations.
Therefore, the community agreement prohibiting tourist use of properties cannot be applied retroactively to homes that had the corresponding authorization prior to said agreement.
What happens if the constitutive deed of the homeowners’ association prohibits tourist rentals?
If the constitutive deed or bylaws of a building subject to the horizontal property regime expressly prohibit the properties from being used for tourist purposes, the community may proceed to order the cessation of such activity.
If the constitutive deed or bylaws include a general prohibition on commercial activity in the properties, the Supreme Court ruled in its rulings of November 27 and 29, 2023, that tourist rental activity is commercial and therefore falls under this prohibition. Therefore, the homeowners’ association, as in the previous case, may order the cessation of said activity.
If the constitutive deed or bylaws do not contain any such prohibition, the owners of the properties may engage in tourist rental activities, which may be limited by agreement of the community in accordance with Article 17.12 of the LPH.
Whether or not there are restrictions imposed by the Community, in order to use the property for tourist rentals, the corresponding regional or local administrative authorizations must be obtained.
Registration of the restriction agreement in the Property Registry
If the Community wishes to prohibit the rental of tourist accommodation in the building, it must convene a meeting of owners, expressly including the agreement prohibiting the use of the accommodation as a tourist rental on the agenda.
If the restriction agreement is ultimately approved by the majority outlined above (3/5 of the total number of owners and participation shares), a certificate of said agreement must be issued for registration in the Property Registry. This will ensure that future purchasers of apartments in the building are aware of the existing restriction and are bound by it.
At TAX LAW ZAVALA MOSCOSO we will be happy to clarify your questions and help you with all the issues related
Manuel Gámez
