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Regulations for Short-term Lets in Cyprus, Greece and London
5 June 2020
Recently, the number of short-term lettings has increased significantly in hundreds of cities worldwide, particularly due to the development and growth of “on-demand economy” and “peer-to-peer” accommodation services. These technology-based platforms essentially provide forums which connect property owners who want to rent out their properties or spare rooms with people seeking short-term accommodation.
However, there are many legal and regulatory challenges since there is no definitive or unified law governing short-term lettings and many countries have implemented their own policies, regulations and restrictions. Approaches in different countries vary and usually it is a requirement for property owners to register their properties or obtain a special license before letting the same on a short-term basis, or imposing a maximum stay limitation.
Cyprus & Greece
For instance, in the recent implemented law governing short-term lettings, N. 9(I)/2020, Cyprus property owners who wish to rent out their properties, must register to the ‘’Self-Service Accommodation’’ Registry, kept by the Deputy Ministry of Tourism, and obtain a licence as well as a registration number which they must refer to when advertising the same. Initial registration lasts for three years and can be renewed indefinitely for three-year periods. Similarly, in Greece property owners must apply before the ‘’Short-term letting Registry’’, kept by the Independent Authority for Public Revenue, and obtain a registration number which again must be published when advertising the property. Further to the registration, Greece facilitates an online platform to which registered property owners must declare the current monthly income until the 20th day of the following month; a procedure not yet regulated under Cyprus legislation.
In addition, Cyprus legislation defines the property types which are allowed for these services as being furnished villas, houses and apartments (in their entirety) and there are further minimum technical property requirements which property owners must ensure they are fulfilled. Such requirements include but are not limited to approved property planning permit, electricity supply, sewerage, air-conditioning, hot/cold water, parking space and an all risks, fire and public liability insurance. In contrast, property types allowed for short-term letting under Greece legislation include single dwellings or part of them or any other properties used as a dwelling. Nevertheless, there are no technical requirements for those properties, but short-term lets are allowed for less than one year and the legislation allows city councils to potentially impose maximum stay limitations. However, this is yet to be implemented.
A different regulatory model has been developed in the UK. United Kingdom’s legislation (Deregulation Act 2015) allows every planning authority to impose a maximum stay limitation that a residential property can be let for short-term accommodation. For instance, in London, where there are more listings and visitors than any other city in the UK, there is a limit of 90 days. Therefore, home owners who wish to use residential properties for short-term accommodation for more than 90 days in a calendar year must seek planning permission from the local planning authorities (change from C3 - dwelling houses to C1 - hotels). However, some planning authorities, for example Islington Council, require property owners to register their properties even if they rent them on a short-term basis for less than 90 days.
Outside London it is up to the planning authorities to impose a maximum stay limitation and to determine if there is a material change of use of the building and if planning permission and change of use is necessary. What is significant, however, is the definition of ‘’material change’’ of use. To clear up the grey area created by this term, planning authorities have developed a range of criteria to determine on the facts of every case if the change of use of the property is significant enough for planning consent to be sought. Some of these criteria include the proportion of the property used and number of bedrooms.
Finally, it should be noted that, in addition to the legal requirements imposed on short-term lettings, in some cases, leases and mortgage agreements may prohibit or restrict short-term lettings.
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