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Legal alert no. 68

Local accommodation

On August 22nd, the Law no. 62/2018 (hereinafter "Law no. 62/2018") was published in the Portuguese Official Gazette, which amends the legal regime for the operation of local accommodation establishments ("RJLAE"), approved by the Decree-Law no. 128/2014 of 29 August.

In total, nineteen articles of the aforementioned Decree-Law no. 128/2014 of 29 August were amended and three new articles were added.

Some of the main innovations are the following:

This Law allows the provision of temporary accommodation services is made to tourists or non-tourists (see Article 2 (1) of the RJLAE), in addition to admitting the modality of rooms of local accommodation. This modality is subject to the maximum limit of three rooms (see Article 3 (1) and (7) of the RJLAE).

The maximum accommodation capacity of the remaining modalities (excluding hostels) is regulated by Article 11 (1) and (2) of the RJLAE, infringement of which constitutes administrative infractions, punishable with fines between € 2.500 and € 4.000, in case of natural persons, and € 25.000 and € 40.000 for collective persons (see Article 23 (1) (f) and (2) of the RJLAE).

The installation and operation of hostels, in buildings under the regime of sectional title and where housing coexists lacks the authorization given by joint owners’ meeting (see Article 4 (4) of the RJLAE), infringement of which constitutes an administrative infraction, punishable with fines between € 125 and € 3.250, in case of natural persons, and € 1.250 and € 32.500 for collective persons (see Article 23 (1) (d) and (2) of the RJLAE).

Regarding the installation of local accommodation establishments, its holder now needs to have a multirisk liability insurance, under penalty of cancellation of the respective registration (see Article 13.º-A (2) and (3) of the RJLAE).

Furthermore, the interested in the installation and operation of local accommodation should make the prior notification with deadline through the Single Electronic Counter (see Article 5 (1) and (2) of the RJLAE), now renouncing the information regarding the name, address and telephone number of the person to be contacted in the event of an emergency – a reference previously required under the original wording of Article 6 (1) (f) of the RJLAE.

The Mayor of the territorially competent Municipality shall oppose the prior notification with a deadline if one of the following conditions is verified: (i) incorrect instruction of the prior notice with a deadline; (ii) validity of the term resulting from cancellation of registration; or (iii) violation of the installation restrictions decided by the municipality or lack of authorization for proper use of the building (see Article 6 (9) (a) to (c) of the RJLAE).

Opposition to prior notice with a deadline is then subject to a 20-day deadline - in the case of hostels - or 10 days for other modalities (see Article (9), of the RJLAE). If nothing is determined at the end of the legally established periods, there is no place for the formation of an administrative act of tacit approval. It only enables the interested party to carry out the intended activity, without prejudice to the powers of supervision of the Administration and the possibility of using the appropriate means to defend legality (see Article 134 (3) of the Portuguese Code of Administrative Procedure).

The Law no. 62/2018 also establishes that the individual who has installed and performs the activity of exploring local accommodation, is subject to the obligation to communicate on the electronic platforms the reservation respective term, within a maximum period of 10 days after cancellation of registration and / or temporary ban on the operation of local accommodation establishments (see Article 6 (5) of the RJLAE).

Pursuant to Article 7 (3) (a) and (b) and (4) of the RJLAE, the change of ownership of the holding, as well as, in case of collective persons, the transfer of 50% of the respective share capital, the expiry of the title of opening to the public of the establishment of local accommodation, except in case of succession.

It was also added the following causes that determine the registration of the cancellation of the establishment: (i) installation of accommodation in violation of the containment areas; (ii) violation of legal established requirements for the development of the activity; and, (iii) in the event that the establishment is located in an unit building or part of an urban building susceptible to independent use, the joint owners' meeting opposes the exercise of local accommodation activity (see Article 9 (1) (b) and (c) and (2) of the RJLAE).

Regarding the opposition, ruled by the joint owners' meeting, it should be pointed out that the decision requires a deliberative quorum of more than half of the permeation of the building and that the deliberation must be justified (see Article 9 (2) from the RJLAE). This opposition applies to all forms of local accommodation.

In this case, the President of the territorially competent Municipality decides on the registry cancelation request of the establishment and may set the period of prohibition of exploitation, which may not exceed one year (see Article 9 (3) and (6) (b) of the RJLAE).

The regulation of the conditions for the operation and identification of each of the modalities of establishment of local accommodation will be affected by Ordinance (“Portaria”), the legislator determines the existence of an information book on the operation of the establishment and its internal rules of use, which should be made available in Portuguese, English and two other foreign languages ​​(see Article 12 (5), (6) and (7) of the RJLAE).

The referred information book should also contain the regulation with the practices and rules of the condominium when the establishments are inserted in buildings of collective housing (see Article 12 (5) to (7) of the RJLAE).

The competency to supervise compliance with legal constraints is now cumulated between ASAE and the territorially competent city council (cf. Article 21 (1) of the RJLAE).

We also note that the condominium may approve the payment of an additional contribution, corresponding to the expenses arising from the increased use of building’s common parts, subject to the maximum limit of 30% of the annual value of the respective contribution (see Article 20-A, of the RJLAE).

The Law 62/2018 establishes, on a transitional basis, that:

(i) the records of local accommodation establishments in the National Register maintain valid;

(ii) the changes introduced by this law regarding conditions of access and activity and installation requirements shall only apply to establishments that are installed after the entry into force of said law;

(iii) local accommodation establishments, existing at the date of entry into force of said law, have a period of two (2) years to comply with the new conditions;

(iv) the owners of more than seven local accommodation establishments located in containment areas (defined in terms of Article 15-A of the RJLAE) may not, from the date of entry into force of Law no. 62/2018, affect more real estate to the exploration of local accommodation (see Article 5 (1) to (4) of the Law no. 62/2018).

Finally, Law no. 62/2018 will enter into force 60 days after its publication, that is, on October 21st, 2018.

To access the full text of Law no. 62/2018, please click here.

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