The dynamics of the demand and supply of local accommodation in the city of Lisbon has created a set of new realities and phenomena worthy of reflection.

 If it is true that the immense and unregulated growth of this form of accommodation guided the panorama of the country and, above all, of its capital until 2014, the truth is that Portugal knew how to respond to the problem with the creation of its own legal system, innovative and attractive –  Legal Regime for the Exploitation of Local Accommodation Establishments –, which definitively placed this figure in the panorama of the offer of accommodation services.

So attractive, it must be said, that this offer proliferates in the most typical neighborhoods of the city of Lisbon, such as Alfama, Mouraria, Madragoa or Castelo. In these areas, local accommodation represented more than 25% of the total available housing.

What is intended with the regulation of this proliferating reality?

The balance between, in one hand, restraining the impact of local accommodation in these neighborhoods and, on the other, the impetus that this activity has given to the level of rehabilitation of vacant houses and the requalification of houses in the city.

What are the main changes?

The aforementioned legal regime has given municipalities the power to restrict the opening of new units for short-term leases. A faculty that they did not have until then. And this is how the figure of the containment areas emerges, a reality in the city of Lisbon since the end of 2018, in which quotas are now fixed taking into account the percentage limits in proportion to the properties available for housing. These areas may exist by parish or by part of it, namely by neighborhoods, and will be reassessed at least every two years.

What are the characteristics of these containment areas?

One of the characteristics that guides the existence of the containment areas, perhaps the one that raises the most interesting and worthy of reflection at the level of local accommodation is the non-transmission of the title of “opening to the public” to future purchasers of the properties on which they are based.

It is the same as saying: it is no longer possible to sell properties allocated to local accommodation with the respective registration incorporated, since it expires as soon as the ownership of the exploration changes.

There will only be no forfeiture in case of succession by death.

This means that it was definitively established that, in the containment areas, the registration number of the establishments takes on a personal and non-transferable nature. And such, regardless of whether it is on behalf of a person or a company.

What are the problems?

It should be noted that, by itself, this measure would not raise any major issues: the new purchaser of the property would only have to register the local accommodation establishment through the “Balcão Único Eletrónico” and wait for the (new) title of “opening to the public” for continue the activity on your behalf.

But add a new fact to the problem: what if the property is located in one of the containment areas, such as Baixa, Avenida da Liberdade, Avenida da República, Avenida Almirante Reis, Bairro Alto and Madragoa, Castelo, Alfama and Mouraria and the Santana Hill?

In one of these cases, the transfer of ownership of the property causes the registration of local accommodation to cease and there is no possibility of proceeding with a new one.

Are there solutions?

It is concluded that the change from what was until then the reality in Lisbon with regard to the purchase and sale of properties allocated to this type of activities is significant and calls for new adaptations by investors.

Consultation with a Lawyer for advice on these issues is essential, especially if we take into account that the history of the regulation of local accommodation is still being written and is constantly changing.