The first prosecutions for illegal rentals through digital platforms are pending

The Deputy Ministry of Tourism has taken legal action against two accommodation establishments found to be illegally offering homes or apartments for rent on digital platforms such as Airbnb.  In response to a question raised by “Entrepreneurial Limassol”, the Deputy Ministry replied that these two cases have been sent to the Attorney General of the Republic for registration.

In relation to these cases we also contacted the Legal Service from where they replied, that at this stage there is nothing that can be said on the matter.  As these are the first cases forwarded to the Legal Service for criminal prosecution, it is considered important that their outcome is important, as a precedent will be established.

The Deputy Ministry of Tourism announced on 20 February 2024 that according to the Law on the "Regulation of the Establishment and Operation of Hotels and Tourist Accommodation", the manager of each self-service accommodation may advertise and rent out the self-service accommodation, provided that it is registered in the Register of Self-Serviced Accommodation and has received a registration permit and registration number from the Deputy Ministry of Tourism. The registration number should be indicated in the advertising and promotion of the accommodation and in all related transactions.

For the registration of self-service accommodation in the register of the Deputy Ministry of Tourism, there is an online platform through which interested parties can register their accommodation and obtain a registration permit.

According to the provisions of the relevant legislation, anyone who maintains or operates a self-service accommodation without a registration permit or has his/her registration permit revoked is guilty of an offence and, upon conviction, is liable to imprisonment for a term not exceeding one year or a fine not exceeding five thousand euros or both.
And if the infringement continues after conviction, he shall be guilty of a further offence and shall be liable to a further fine not exceeding two hundred euros for each day of continuation of the infringement.

As we were told by the Deputy Ministry, to date no registration licence has expired from those granted 3 years ago, which will start happening at the beginning of August. So, some applications are arriving, but gradually the flow is expected to increase during the months of July and August.  At the same time, new registrations are being made continuously. We were told by the Ministry that while the original registrations were valid for 3 years, the current renewal of registration will be valid for 5 years, without the need to produce all the documents that were originally submitted.

Regarding the new regulation voted by the European Parliament on the exchange and collection of data for these services, it aims to promote a transparent and responsible digital platform economy in the EU, while protecting consumers from misleading short-term rental offers. As we were told by the Deputy Ministry of Tourism, it has not yet entered into force and that there will be a transitional period for its adoption, because it is not simply a matter of implementing the regulation.

In order to implement it, platforms will be developed on a pan-European level to interconnect data from all over the EU, so it is very premature to talk about this regulation, as we were told. 
Under the new regulation, EU Member States will create a single digital entry point to receive data from the platforms on the host's activity on a monthly basis (e.g. number of nights for which the unit was rented, number of guests, address, registration number, URL of the listing). The collection of this data will allow authorities to monitor compliance with the registration procedures of hosts and national authorities to implement appropriate policies in the field of short-term accommodation rentals.

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