The Supreme Court annuls the single registry of tourist rentals

The Supreme Court has annulled the single registry of short-term rentals that are intended to be advertised through digital platforms, regulated in Royal Decree 1312/2024 of December 23. The reason is that it considers that the State "lacks the competence" to establish an exhaustive regulation of a national registry that overlaps with existing regional registries regarding the registration of properties intended for tourist rentals. 

The Generalitat Valenciana appealed this state norm which regulates the procedure for the Single Registry of Rentals, and creates the digital single window for Rentals for the collection and exchange of data related to short-term accommodation rental services. 

The Supreme Court ruling partially upholds the appeal, annulling only those provisions that create the so-called “single registry of rentals” and dismissing the appeal regarding the provisions that regulate the digital single window for rentals, the data transmission obligations of online platforms, and data transmission for statistical purposes. 

The court begins by recognizing that there is “a growing concern, both at the European Union level and at the national level, about the rental of short-term accommodation using online platform services”. Furthermore, that an attempt is being made to curb the abuses that have been occurring in the use of this type of rental to evade state regulations on long-term rentals or regional sectoral regulations on tourist rentals created by the Autonomous Communities. 

Likewise, it reflects that there has been a constant increase in this type of rental with an impact on the decrease in the number of homes intended for long-term rentals and the consequent increase in the price of rentals and housing in cities. This has generated housing access problems and the progressive displacement of regular residents to other areas, with the consequent impact on citizens' lives and the social composition and neighborhood cohesion of certain neighborhoods. 

This situation led to the adoption of Regulation (EU) 2024/1028 of the European Parliament and of the Council of 11 April 2024 on the collection and exchange of data relating to short-term accommodation rental services, which establishes harmonised rules regarding the registration system and data-sharing requirements for online short-term rental platforms. 

The challenged Royal Decree states that it is issued in application of Regulation (EU) 2024/1028, but the Supreme Court ruling understands that although the European regulation obliges to adapt existing registration and information systems for short-term rentals to the provisions of the Regulation. However, it does not establish that the registration procedure established in a Member State must be national, nor does it affect the distribution of powers existing in the Member States. 

The core of the debate focuses on determining whether the State has the competence to issue this regulation, concluding that it does not have it in certain aspects. 

To this end, it analyses different grounds of competence: civil legislation and the organisation of public registries and instruments (Art. 149.1.18 CE), basic conditions that guarantee the equality of all Spaniards in the exercise of rights and the fulfilment of constitutional duties (Art. 149.1.1 CE), bases and coordination of general economic planning (Art. 149.1.13 CE), statistics for state purposes (Art. 149.1.31 CE). 

And it rejects that the exhaustive regulation of the new national single registry has coverage in any of them. 

The ruling considers that "we are not dealing with a substantive regulation of short-term rentals, nor is the established registration procedure intended to register a rental contract or encumbrances or limitations of ownership in order to take effect against third parties, but rather it is a single registration procedure in relation to properties, or parts thereof".

This allows to obtain a registration number as a necessary requirement to be able to offer a short-term rental or lease service through online platforms, without the jurisdictional title of article 149.1.8 CE (regarding the regulation of public registries), being suitable to regulate a procedure and a registration of these characteristics. 

It also rules out that it can be covered by the title “Bases and coordination of the general planning of economic activity” (art. 149.1.13 CE), since it is considered that the regulation exceeds what constitutes specific “bases” or “coordination measures”, to establish an exhaustive regulation of a national registry that overlaps with existing regional registries regarding the registration of properties intended for tourist rentals. 

It is admitted, however, the competence of the State to regulate the digital single window, the coordination of windows, the data transmission obligations of online platforms and for statistical purposes, using its competences of “coordination of the general planning of economic activity (art. 149.1.13 CE) and “statistics for state purposes” (art. 149.1 31 CE).