Short term accommodation rentals: latest update on EU-wide proposed regulations

Short term rental properties (STRs) now make up around 25% of all tourist accommodation bookings in the EU. Over the last 12-18 months, EU lawmakers have been discussing the introduction of a new regulatory framework for STRs to enable EU public authorities to introduce some governance and accountability in the sector; a framework they say is currently lacking. 

The proposed framework has moved a step closer in recent weeks (during September 2023) as the European Parliament has now put forward its agreed position on the draft legislation. This article summarises the key points from that draft legislation to enable online accommodation platforms to consider how it will affect them.

What is a short term rental property?

The term ‘STR’ includes a room in a host’s primary residence (with the host present), a host’s primary or secondary residence rented out for a limited number of days per year, or investment properties bought by a host and rented on a short-term basis. The purpose of the short-term rental can be for leisure, business or study.

Crucially, it does not include hotels or other similar tourist accommodations such as resort hotels, suites or apartment hotels, hostels, motels, camping grounds or recreational vehicle parks or trailer parks.

Why are the regulations being introduced?

There are a number of drivers behind the new laws:

• currently, there are diverging and overly burdensome data sharing frameworks at national, regional and local levels across the EU;
• there is a lack of oversight and accountability for rogue or illegal hosts;
• authorities struggle to obtain data from online platforms and hosts, making it difficult to protect consumers (guests); and
• local community issues such as a lack of affordable long-term housing and permanent residents being displaced or disturbed.

It will apply to online accommodation platforms – both large and small – which sell into the EU.

It is envisaged that the regulations will:

• harmonise and create more transparency in the way in which data about STRs is generated and shared within the EU – this will be done through inter-connected systems;
• enable relevant authorities to develop and enforce local STR laws, and ultimately, reduce the number of illegal STR listings; and
• alleviate local community issues and help to bring about safer and more sustainable tourism.

Content of the proposed laws

The core requirements of the proposed regulations are that:

• Authorities will be encouraged to create registration systems which hosts must use to register their STR properties. As part of the registration process, each host and STR property will receive a unique registration identification number.

• Online platforms must enable hosts to display their registration numbers and share specific data about hosts’ STR activities and listings with public authorities (including the STR address, the STR registration number, the number of expected and actual bookings, the number of guests which stayed in the STR per booking etc.). There will, however, be more lenient reporting obligations for “small” or “micro” STR platforms.

• Each EU Member State must set up its own ‘single digital entry point’ which enables hosts to upload (and relevant online platforms to check) the information. There will be 27 digital entry points in total – one for each EU Member State. Online platforms will be required to adapt their IT infrastructure in order to connect to the relevant digital entry points, randomly search for valid registration numbers, check the accuracy of hosts’ self declarations and use it to transmit the requested data to the relevant authorities.

• Designated national competent authorities will be appointed to oversee and enforce the registration and data sharing schemes and rules, within each EU Member State. These authorities must provide update reports to the EU Commission every two years.

European Parliament – latest position

The European Parliament has listened to the latest concerns from lawmakers and has revised its position on the legislation. In respect of three key areas, that position is now as follows:

• Host and platform liabilities: hosts will now be able to “self-declare” information regarding their short-term rental accommodation, with online platforms only having to “make best efforts to assess” whether the information declared by the hosts is illegal or not. In addition to this, online platforms will have a duty to inform hosts about the applicable rules. This is a move away from the position that platforms should be liable for any information declared by hosts.

• Checks on information provided by hosts: each Member State will have its own ‘single digital entry point’ rather than there being one for all Member States. However, further provisions will be included in the regulations which require the European Commission to reassess the position in four years’ time, to determine whether a single interface for all EU Member States will be appropriate.

It has also been agreed that the requirement for online platforms to carry out annual checks on 20% of its listings was too burdensome. It has now been agreed that platforms should “make reasonable efforts to randomly and regularly check the listings”. The number of times that this must happen will not be specified, nor will there be any specific recurrence periods.

• Sanctions for breach: it has now been agreed that authorities should have the power to suspend, rather than withdraw, authority to rent accommodation. For repeat offender hosts, the relevant local and national authorities will have the power to take appropriate further action to “prevent the commercialisation of a unit”. In practice, this could still include withdrawing authorisations (which was the only option in the previous draft).

On 19 September 2023, the Committee on Internal Market and Consumer Protection voted to approve the amendment texts. A copy of the adopted compromise amendments can be found here.

Next steps

The amended proposed regulations now need to be confirmed by the European Parliament in early October. Following this, further negotiations are set to take place with the European Council.

The date on which the regulation will come into force remains uncertain. However, once it does come into force, EU Member States will have a two-year transition period to make the relevant IT, registration and database arrangements before the regulations take effect.

If you think your business may be affected by the upcoming regulations and you would like more information, or if you have any questions, please do not hesitate to get in touch with us.