WELKEYS INFO: ELAN Law, what changes for your vacation rental

The vacation rental industry has faced strict regulations following the explosion of this emerging market. The ALUR law regulates the activities of owners who wish to rent out their property. However, owners are no longer the only ones held responsible... In other words, rental platforms are no longer spared, due to the application of the ELAN law through the introduction of multiple sanctions.

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A reminder of the ALUR law

The ALUR law mandated that short-term rentals be limited to a maximum of 120 days per year for primary residences in municipalities with fewer than 200,000 inhabitants. A renter living in a municipality with more than 200,000 inhabitants is required to register with the town hall to obtain a registration number. This number must then be displayed on their listing on rental platforms. The owner of a secondary residence must declare their vacation rental activity and obtain authorization from the town hall to convert their residential property into a vacation rental. Furthermore, they must also display their registration number on their online listing.

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The ELAN law

The ELAN law (Evolution of Housing, Planning, and Digital Technology) is expected to be enacted soon, as members of parliament definitively voted on the text on October 3. It strengthens the framework for short-term rentals like Airbnb by providing for heavy penalties for both owners and websites that do not comply with their obligations.

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Owners are facing increased oversight and stricter penalties.

Article 51 of the ELAN law introduces an obligation for the renter to provide the municipality, upon request, with a statement of the number of nights the property was rented during the current year. Failure to do so will result in fines of €5,000 and €10,000, respectively. Furthermore, renters who do not declare their vacation rentals face a fine of up to €5,000. If the property exceeds the maximum number of rental days (120 days), the owner is subject to a €10,000 fine. Additionally, if the owner of a secondary residence does not change the usage of their property to a tourist rental, they must pay a fine of €50,000.

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Rental platforms and their heavy penalties

Airbnb, Booking.com, and others are facing stricter regulations. The main objective is to include the registration number through administrative procedures. Furthermore, they must provide the municipality with information regarding the number of rental days. Under these conditions, if the renter lists their property for more than 120 days per year, rental platforms must block the client's listings. If they fail to do so, Article 52 of the ELAN law introduces new fines for rental platforms: if the rental site does not display the renter's registration number, the fine is €12,500.

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In addition to this, in the event of a refusal to block listings beyond the deadline for a primary residence, the maximum fine is €50,000 per property. As a result, platforms are now subject to heavy financial penalties. In conclusion, internet platforms signed an agreement with the government in June 2018 regarding numerous commitments. Thus, by December 31, 2018, an automatic tool for blocking listings will be implemented as soon as the 120-day-per-year threshold is reached. A system will be put in place to identify "duplicate" listings to prevent advertisers from bypassing these rules by changing their listing site after reaching their 120-day quota.