Rules for renting out through Airbnb and Booking.com

Rules for renting out through rental platforms: Airbnb and Booking.com

What are the rules for renting out through rental platforms?

Today you may rent out your own permanent home for up to 70 days a year when the rental goes through platforms that report to the Danish Tax Agency (Skattestyrelsen), and for 30 days if you rent out without them. The municipality can raise the limit to at most 100 days, but the City of Copenhagen has not done so. See the current rules. The parties’ newly proposed initiatives are therefore not a change to the law itself, but to how it is enforced. We have previously written an article on the rules on short-term rental.

What do the newly proposed initiatives contain?

A statutory duty to provide information: The government wants to require rental platforms, owners and landlords to hand over relevant information to the supervisory authority about, among other things, the landlord and the rental activity.

Blocking bookings: The government wants to give the supervisory authority the power to order rental platforms to block bookings or remove listings when the rental limit has been reached.

Better options for sanctions: The government wants to raise the fines for landlords who do not follow the rules, and at the same time make it possible to fine rental platforms if they do not comply with orders from the supervisory authority to block the rental calendar.

The municipalities’ role in supervision: The government wants to give the country’s municipalities the option of taking over supervision of the rental limits.

A statutory duty to provide information

This initiative is meant to let the supervisory authority (which may be the municipality in future) keep an eye on the landlord and the activity on the landlord’s listings. This is information the booking platform already requires landlords to fill in today before they can start renting out their units, as a general KYP (Know Your Partner) under the EU directive.

Blocking bookings

This initiative is meant to make things harder for landlords who systematically exceed the annual rental limits, by going to the platform rather than the landlord. This will make sure that the landlord cannot exceed the limits any further. However, we find this problematic, as it requires a great deal of coordination between the supervisory authority and the rental platform.

Better options for sanctions

Any fine must be seen in the light of the fact that you would first receive an order from the supervisory authority to block the rental calendar. From the parties’ proposal, it is hard to tell whether the order would be sent first to the booking platform or directly to the landlord.

The municipality’s role in supervision

There needs to be a broader, local “task force” to enforce the rules, and that may well be the municipality. Today the Danish Agency for Planning and Rural Affairs (Plan- og Landdistriktsstyrelsen) is the supervisory authority in this area. The government therefore proposes that the task should go to the municipality, which already today can raise the limit from 70 to at most 100 days a year. We see this point as problematic, because it requires more expertise at the municipality and a whole new department to tackle it.

Setting up a digital registration system for all short-term rentals

With the current proposals, it will be the government, landlords and the booking platforms that feel the consequences of the changes, even when they do not break the limits. This is because there is currently no natural limit for blocking rentals if they go beyond the dates.

By contrast, a central registration system that gathers data on rental units would give supervisory authorities, landlords and booking platforms much more peace of mind. However, it would take a lot of bureaucracy and administration. It has been estimated that this central digital registration system would cost around DKK 80 to 110 million (in Danish) and take two to three years to develop. That is why this model has not been prioritised for now.

As an experienced property manager for landlords in short-term rental, we also find that several of our clients come to us and ask us to explain the rules. What are the day limits, what happens if I do not keep to them, and how do I make sure my apartment follows the rules?

These are all valid questions, and with the government’s new proposal they can feel hard to navigate right now. We help our clients with this every day, and it is especially important that, if you are thinking of renting out your apartment, you take the rules into account and consider renting out through an experienced property manager.