Are you complying with the new Portuguese tourist rental licence requirements? Alojamento local

In October 2018, Portugal enforced a new law with more requirements for obtaining (and maintaining) the Portuguese AL-licence (Alojamento Local). Almost six months later, with the subject being less discussed in news and public discussions, many property owners have put the new law 62/2018 aside and only half of them still remember what actually changed.

With many owners now preparing for the upcoming season, it may be worthwhile reminding ourselves of the new requirements, in order to be in full compliance with the new short term rental law. The requirements of law  are quite simple to follow. Here is an overview of changes that the law 62/2018 brought to us.

Priority to residential housing

Fighting the limited and even insufficient supply of housing to residents in certain parts of the bigger cities and resort areas like the Algarve has probably been the igniter for changing the lodging law.

The government is now entitled to create zones where only a limited amount of AL licences can be issued. In the meantime, some areas in Lisbon like Bairro Alto or Castelo have already received the status of being an área de contenção.

These zones will typically be zones where housing is very limited (and demand very high) and the necessity of it will be re-evaluated every two years.

This means that licences of existing short-term rental properties are no longer transmittable to a new owner if  the property is sold or inherited. This law is already in effect and city councils may suspend the issue of new licences immediately.

 Property signage and information

All properties holding an AL-licence, except for villa's, must now identify themselves with an AL-plate outside the wall of the building, next to the entrance. Only an approved format is allowed as plate.

Within the property, property owners must place a multi-lingual information book. The purpose of this book is to give clear and reliable information to all guests about rubbish disposal, usage instructions for any appliances within the property like the microwave oven, oven or barbecue, contact information of the property manager or owner as well as the rules of the condominium if the property is part of a condominium.

This book must be in Portuguese, English as well as 2 other languages which can be chosen by the AL-holder.

The power of the condominium

For properties located in a condominium, there may be additional charges. Condominium management companies are now entitled to increase charges for properties holding an AL-licence by up to 30%, if approved by ⅔ of the owners within the condominium. With competition between management companies being high in areas with many AL licenced properties, only few management companies have taken any steps so far in increasing their charges.

However, the majority of owners within a condominium can oppose the use of any condominium property for holiday rentals. This mainly affects new applicants, as for the existing licence holders, a cancellation of the licence can be requested by the majority of owners within the condominium, but also needs to be approved by the municipality.

In any case, all condominium properties with an AL-licence must now have an insurance in place to cover the risk of damage caused by guests to the common areas of a condominium. New applicants must have this insurance immediately in order to obtain the licence. Existing properties need to have this insurance in place within the transition period of two years.

Law enforcement 

It has been announced that inspections by the municipality and ASEA will now be more frequent. If the property is found non compliant with the requirements, the city hall may shut an AL licenced property down, with additional fees and penalties.

Background

Overall and especially compared to other countries, the revision of Portugal's short-term rental laws has not changed it dramatically. An estimated 30.000 families depend on AL related activities, which does not include the many thousands of independents and small companies active in this field. Tourism remains a very important and dynamic source of income in many parts of the country and also this is reflected by Portugal's "soft" approach. On the other hand, less than a third of properties fully or partially used for the holiday letting market have the correct licence for this activity. 

Belalgarve Consultants | Tourism and Real Estate, a Portugal registered national brand, is a consultancy firm covering the tourism and real estate markets in Portugal and Cape Verde. With access to more than 5000 investment opportunities in Portugal and Cape Verde, we can be your ideal partner if you are looking to invest or operate your business within any of these markets.

We also help managing any real estate asset on the tourism, holiday rental or long-term market. Our vast experience in tourism as well as property management will help maximizing the revenue and efficiency of your asset or second home. Contact us without any commitment for more information or visit www.belalgarve.com .

More information: vera@belalgarve.com