Short-term rental during the COVID-19 pandemic

Over the past couple of years, the short-term rental sector in Poland continues to grow and evolve at speed. However, due to the outbreak of the COVID-19 pandemic and restrictions introduced by the government, this convenient and often very profitable form of real property investment is currently in the crisis, affecting especially those people for whom rental is the main source of income and who took out a bank loan to buy the premise. The consequences of the crisis are to be mitigated by the solutions introduced as part of so-called “anti-crisis shield” law, which – under the government’s promises – are going to protect the interests of landlords and mitigate their losses.

What a short-term rental refers to?

A short-term rental is a specific type of tenancy under which a landlord grants possession of a premise (room, apartment, or house) to a tenant for a short period (typically, from one to a maximum of several days) in exchange of agreed rent. It is addressed primarily to tourists and business travelers. The owner of the property, using this type of tenancy, can decide whether to make the premise available to rent all year round or in a given period, e.g. only in the summer season. Short-term rental is popular mainly in tourist in locations considered as tourist resorts and large cities. With the development of Internet platforms such as Airbnb and Booking, this solution became widely available and over time it began to be considered as an alternative to hotels.
What restrictions concerning a short-term rental have been put in place due to the COVID-19 outbreak?

Due to the COVID-19 outbreak, since March 14, 2020, a state of epidemic threat has been announced in the Republic of Poland under the regulation of the Minister of Health dated March 13, 2020. Based on the said act as well as laws and regulations adopted afterward, the Polish government has established many restrictions applying directly to a specific group of entities, including those operating in a short-term rental business.

First, based on the above-mentioned regulation of March 13, 2020, the Minister of Health has decided to prevent companies from running holiday and other short-stay accommodation (included in subclass 55.20 of the Polish Classification of Activities, therefore excluding hotels) with the effect from 15 March 2020. This strictly applied to short-term rentals.

A few days later, the above-mentioned regulation has been replaced by a regulation of 20 March 2020, under which the Minister of Health announced the state of epidemic related to Coronavirus infections in the territory of the Republic of Poland. Surprisingly, neither the said regulation nor the following one announced on March 24, 2020, contained provisions strictly referring to a short-term rental. This led to a conclusion this type of business activity is once again allowed. However, this was true only in theory, because the movement restrictions enforced by the Polish government made it practically impossible for property owners to offer short-term rental.

This state of affairs, however, did not last long, since, on March 31, 2020, the Council of Ministers adopted a regulation on the establishment of certain restrictions, orders and bans in relation to the state of the epidemic (the so-called “Anti-Crisis Shield 1.0.”), which introduced a temporary restriction on the conduct of activities related to the provision of hotel services. Thus, from April 1, 2020, a prohibition on short-term rentals has been reintroduced.

The said prohibition consists in a complete ban, excluding the provision of services consisting in providing accommodation for persons: (i) covered by quarantine or isolation, (ii) practicing the medical profession, and (iii) performing professional activities or official tasks, non-agricultural economic activity or conducting the agricultural activity. Guests who have been staying in the hotel facilities at the time the new regulations enter into force must be checked out by April 2, 2020.

What is the current situation of the short-term rental business in Poland?

From April 20, 2020, the Polish government started gradually “unfreezing” the economy. First, the government lifted several restrictions regarding trade and social activities, including lifting ban on movement in public spaces and increasing access to stores. Then – based on the Council of Ministers’ regulation of May 2, 2020 – from May 4, the second stage of loosening coronavirus restrictions began and concerned, among other things, the re-opening of hotels, guesthouses and other facilities offering overnight accommodation.

This means that currently in Poland the short-term rental is again allowed, although it is subject to a number of restrictions, including (i) ban on food services (for now it is allow to serve meals only on a take-away basis or for room service delivery) and (ii) restrictions on hotel common areas that group together guests, such as swimming pools, gyms, and play rooms. In a related move, the Ministry of Development, posted on its website “Guidelines for the operation of hotels/facilities/pension houses in Poland during the COVID-19 epidemic” setting out further and more detailed restrictions.

What financial support the government offers to the property owners conducting a short-term rental business?

The property owners conducting a short-term rental business can take advantage on different support measures which have been made available to Polish business, such as:

The article is for information purposes only and under no circumstances constitutes a legal opinion or advice. For more detailed information or legal assistance, contact DT’s lawyer.

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2020-05-13 15:44

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