Introducing the concept of condominium tourist establishments
This concept is aimed at facilitating the modernization of tourism and increasing its flexibility.
In recent years, autonomous community legal systems have gradually introduced new concepts aimed at facilitating the modernization of the Spanish tourist offering and increasing its flexibility. Most notable is the introduction of the condominium division of tourist accommodation establishments and other similar concepts that entail the co-ownership of such establishments.
Conceptually, it will be possible for tourist accommodation establishments to be shared by various individuals under any of the co-ownership schemes permitted by law without, however, said individuals being entitled to the unrestricted enjoyment of the units making up the establishment. The latter is governed by a tour operator (the title-holder of the activity) who manages the establishment in compliance with the rule of unity of exploitation, which is in no way infringed by the condominium division. In return for investing in the acquisition of an inseparable part or a unit of the establishment, owners acquire the possibility of enjoying, for a limited time period, one of the units of the tourist accommodation establishment and a specific return on their investment.
Condominium tourist accommodation establishments are found all over France and other neighboring countries and, from the standpoint of the tour operator, are a form of financing such establishments. In Spain, they have been introduced in recent years in certain autonomous community legal systems, e.g., on the Canary Islands, in Valencia, on the Balearic Islands and in Andalucía. A part of the Catalan tourist industry has recently been seeking to have this concept introduced, in the hope that it will serve to boost the possible revitalization of the Catalan tourist offering.
From a legal standpoint, there are, without a doubt, any number of legal challenges to be met when regulating the concept of tourist condominium, since its introduction has implications from various points of view: not only from the standpoint of the industry-wide regulations on tourism, but also from the standpoints of civil law, urban development and consumer and user protection. The main challenges that arise when regulating the concept are as follows:
Preservation of the rule of unity of exploitation. First, the authorities’ greatest concern is to ensure the unitary management of tourist establishments, even if their ownership is divided among the various members of the condominium. To uphold the rule of unity of exploitation (defined by Catalan legislation as the “form of engaging in the tourist accommodation activity, which ensures the permanent availability of all of the establishment’s accommodation units”) is the objective of the regulations. This concept has not yet become widely extended in the Spanish tourist culture and the risk of one of the owners deciding unilaterally to use or manage one of his units would entail the violation of the rule of unity of exploitation and, accordingly, the breach of one of the guiding principles of the tourism activity.
With a view to securing compliance with the rule of unity of exploitation, legal systems that have introduced this concept require the execution of an agreement common to each and every one of the owners of the property, with a tour operator who will be the title-holder of the establishment. The acquisition of the naked ownership of a share in the condominium or in one of the tourist establishment units must necessarily entail the subrogation of the acquirer to the agreement executed with the tour operator. In order to secure future compliance with the rule of unity of exploitation, there must be a clause to which all co-owners are subject, pursuant to which they must select a new tour operator (or renew the existing operator) upon termination of the agreement.
Ensuring ongoing use by tourists: in connection with the previous problem, it is also necessary to prevent the tourist accommodation units from being used for purposes other than tourism (fundamentally for residential purposes). In order to do so, various legal systems have introduced the presumption that residential use exists in the event of a registration of domicile (empadronamiento) or the contracting of services on an individual basis, separate from the services contracted by the entire tourist establishment. The normal consequence of this violation of ongoing tourist use is not only the obligation to discontinue the undesired activity and the imposition of the related penalties under the condominium division scheme, but also the commencement of the appropriate penalty proceeding and, as the case may be, the striking off of the establishment from the related administrative register.
It is important to bear in mind that a breach by one of the co-owners cannot entail the imposition of penalties on the co-owners not in breach and, accordingly, mechanisms must be introduced which make it possible to penalize one of the co-owners without its unsuitable conduct causing detriment to the others.
Protection of third parties and of consumers and users. Lastly, it must be borne in mind that most co-owners will be individuals who are also consumers and users; for this very reason, it is necessary to ensure that potential co-owners are made aware, prior to their acquisition, of the terms of the management and use of the accommodation units and the limitations this entails on their ownership right.
For this reason, the administrative document setting out the terms of use and management of the property (inter alia, the assignment of use to the hotel operator with whom the agreement is executed and the fact that the accommodation unit must be used by tourists rather than for another use) must be registered at the Property Registry. The level of information to be provided by the developer to potential acquirers of the units must also be regulated.
In Cataluña today, although the concept of hotel condominium is already permitted, it is not specifically regulated. This creates a legal vacuum that, in practice, means that the opening of establishments under this scheme is not authorized. Thus, Catalan Law 3/2015, of March 11, 2015, on tax, financial and administrative measures in Cataluña introduced a number of amendments in Catalan Tourism Law 12/2012, of June 21, 2012, aimed at permitting the concept of hotel condominium, most notably increasing the flexibility of the definition of the rule of unity of exploitation, thus permitting the division of the property’s ownership, but at no time the management of the establishment. It also introduced Additional Provision Eight, under which the Autonomous Community Government is required to approve, within one year, a provision to regulate the condominium division of tourist accommodation establishments.
Although at first consideration was given to the possibility of creating an ad hoc provision for this type of establishment, the applicable rules were subsequently introduced into the new Catalan Tourism Regulations, submitted to public information by edict on July 30, 2015 and pending approval by the Autonomous Community Government.
Although the initial reticence of the authorities to introduce the concept of tourist condominium is understandable, it is a concept that, where suitably regulated to uphold the unitary exploitation of the establishment and protect the rights of owners, has proven to be an effective way to revitalize the existing tourist offering.
In Spain new concepts have recently been introduced in some legal systems, with a view to modernizing the tourist offering and increasing its flexibility.
Garrigues Tourism and Hotels Department
