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New ruling prohibits Local Lodging in residential buildings

The Supreme Court of Justice has decided that a flat intended as a permanent dwelling cannot be used for Local Lodging.

Possible impacts and implications

The ruling reported last Thursday states that in the “horizontal property regime, the indication in the consecutive title deed, that a certain fraction is intended for dwelling purposes, should be interpreted as meaning that local accommodation is not allowed”.

This measure may present obstacles to new investments that would be made in the accommodation and tourism sector and all the services associated with Local Lodgings, such as cleaning and construction. Despite the announcement of the new ruling, there have been few requests for licence cancellation and the number is not expected to increase dramatically.

According to the president of the Association of Local Lodging in Portugal, in concrete terms, the new ruling implies that if there is a conflict between the condominium and a Local Lodging unit, the decision of the Court will give preference to the condominium.

Consequences in the Algarve

For the Algarve Association of Hotels and Tourist Resorts president, the region will be one of the most affected by the new limitations imposed on Local Lodging. Albufeira is in the top three cities in the country with the most significant number of local accommodation units, along with Lisbon and Porto. The district of Faro represents about 38% of the total number of local lodgings in flats.

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