Short-Term Rental in a Residential Building – What Owners Need to Know Before Buying an Apartment

Buying an apartment for short-term tourist rental was long considered a simple investment model. A buyer would find a property in a good location, renovate and furnish it, obtain the necessary approval, and start welcoming guests.

Today, the situation is considerably more complex. In addition to the price, location and expected return, it is necessary to check whether the apartment can legally be used for short-term rental at all. This is particularly important for properties in multi-apartment and mixed-use residential buildings.

Co-owners' consent has become a key requirement

Short-term rental refers to renting out an apartment or part of an apartment for temporary accommodation for a period of less than 30 days.

To start such a rental activity, prior written consent from the co-owners representing more than two-thirds of the co-ownership shares in the building is required. However, a two-thirds majority alone is not sufficient.

Consent must also be given by all owners of apartments whose walls, floors or ceilings adjoin the apartment intended for rental. In practice, this most often includes neighbours on the left and right, as well as the owners of apartments directly above and below the property.

Before purchasing an apartment with the intention of renting it to tourists, it is therefore not enough to ask the seller whether the building already contains holiday apartments. It is necessary to verify whether there is valid written consent specifically for the apartment you are buying.

Consent is transferred to the future owner

Consent for short-term rental is granted for a fixed period, which cannot be shorter than five years. Both the consent and the period for which it was issued are binding on the future owner of the apartment.

This means that a buyer can take over an apartment that already has the necessary consent, but must verify its content and expiry date. A verbal statement that the "neighbours agree" is not sufficient.

Before signing the sale and purchase agreement, the buyer should request the written consent itself and establish whether it applies to the specific apartment, who signed it and how long it remains valid.

It is also important to check whether the current owner has obtained the appropriate approval for providing accommodation services. Co-owners' consent and the approval for rental are connected, but they are not the same document.

What about apartments that were already operating?

Owners of apartments that were already being used for short-term rental when the new rules entered into force were not required to stop operating immediately.

They were given a five-year transitional period to obtain the required consents. If they fail to obtain them within that period, their right to provide accommodation services expires, and the existing approval may be revoked ex officio.

A buyer therefore should not assume that everything has been resolved simply because the apartment has been advertised on tourist accommodation platforms for years. Existing operations are not proof that the rental activity will be allowed to continue after the transitional period expires.

Consent can also be revoked

Obtaining consent does not mean that the owner can disregard the rules of living in the building. If short-term rental results in three or more violations of the house rules and the rights of other co-owners within a two-year period, the consent may be revoked.

A revocation is decided by an absolute majority of the co-owners.

Problems most commonly arise due to noise, inappropriate guest behaviour, improper waste disposal, misuse of common areas or frequent late-night arrivals.

The owner remains responsible for the way the apartment is used even when rental management has been entrusted to an agency or another person. The law explicitly provides that the owner is not released from liability simply because the apartment has been made available for use by a third party.

Building reserve contributions can be twice as high

Under the co-ownership agreement, the co-owners may determine that owners of apartments used for short-term rental pay building reserve contributions of up to twice the amount paid by owners of apartments used for residential purposes.

This is not an automatic obligation in every building, but it represents a cost that investors should include in their financial plan.

When assessing profitability, it is not enough to take the expected nightly rate and multiply it by the number of days in the season. Platform commissions, cleaning, utilities, building reserve contributions, taxes, maintenance, furnishing, periods without guests and management costs must also be taken into account.

Local rules may also restrict new accommodation capacity

The decision of the co-owners is not the only requirement. Cities and municipalities may adopt decisions regarding the number, type and category of accommodation facilities, as well as accommodation capacity within their territory.

When issuing new approvals, the competent authority must take such local decisions into account. This means that an apartment may have the building's consent, but the issuance of a new approval may still depend on the rules of the specific destination.

Regulations can be particularly important in cities and tourist destinations with a large number of holiday apartments and a shortage of housing for long-term residential use.

What should you check before buying?

Before purchasing an apartment that you plan to use for short-term rental, you should check the ownership and construction documentation, the existing consent of the co-owners, the period for which it remains valid, the approval for providing accommodation services, the co-ownership agreement and local restrictions.

You should also speak with the co-owners' representative. The residents' attitude towards tourist rental can be just as important as the view, distance from the city centre or the interior design.

Purchasing without carrying out the necessary checks can result in buying a property priced as an investment apartment that may legally be used only for residential purposes or long-term rental.

Short-term rental can still be a worthwhile investment, but it is no longer a model that should be entered into without a detailed legal and financial analysis.

Eurovilla provides clients with support when selecting and purchasing properties for residential or investment purposes. Contact us to verify whether a property is suitable for your plans and intended use before making a decision.