GT verdict: Much ado about… Airbnb

“Groundbreaking decision: neighbours beat a businessman who bought an apartment for Airbnb” or “The building authority has made an unprecedented decision. It banned the owner of an apartment in Jungmannova Street from renting it out via the Airbnb platform.”

Recently, articles in reputable media have made statements that could easily be interpreted as the end of Airbnb in Prague, if not the entire Czech Republic. However, the situation is different than it may seem at first glance.

If you are in the short-term rental business or use the service yourself, you may have noticed in recent weeks the case of a businessman who has been banned from renting out one of his apartments on a short-term basis. In addition, the association Snesitelné bydlení v centru Praha (Liveable Housing in the Centre of Prague) described the decision as a breakthrough that will start a series of cancellations of Airbnb rentals in Prague.

In this case, however, it was a situation where the landlord was violating the law and was therefore prohibited from short-term rentals, rather than a situation where the short-term rentals themselves were against the law or a by-law. The neighbours of the respective apartment regularly complained about noise, smell or destruction of common areas. Such a situation is one of the few reasons that can lead to a ban on the operation of short-term rentals, in addition to violation of the statutes of the unit owners’ association (SVJ), disturbance of property or disturbance of the night peace. The owner of a dwelling unit is obliged to comply with the rules governing the management of the building and the use of the common parts, as well as to ensure compliance with them by persons to whom he has granted access to the house or apartment.

The Supreme Court also ruled in favour of Airbnb entrepreneurs on 15 March this year in a decision See 26 Cdo 854/2022 that the ban on short-term rentals cannot be included in the statutes of the unit owners’ association. Such a provision would be an interference with the property rights of the unit owner and, as such, inadmissible.

The above-mentioned decision may mean that the authorities and other residents of the building will be stricter towards short-term landlords and tenants and will generally contribute to better enforcement of the already effective law. In our opinion, however, it will not lead to a drastic decline or complete disappearance of this type of business.

Airbnb is still in a relatively grey zone. This is to be changed by the end of 2024 by the Single eTourist Register, which will be established under the EU Regulation. It will record all accommodation establishments, short-term accommodation units and persons accommodated. Thus, Airbnb will become a state-regulated and without any further a legal way of doing business, which could bring up to one billion crowns annually to the Czech state coffers.