Is living space illegally repurposed when it is used by holidaymakers?

When is there a case of illegal repurposing?

A holiday home is generally understood to be, usually, a furnished living space where, against payment, guests are able to spend their holiday for a specific period. Such holiday homes are normally made available as accommodation for booking and renting in online portals (such as, for example, traum-ferienwohnungen.de).

If somewhere that was originally intended and approved as living space is used for something else then this would constitute illegal repurposing. Therefore, a typical example of illegal repurposing is when owner-occupied residential property or rental apartments are converted into holiday homes.

In towns or regions with tight housing markets, converting properties into holiday homes can result in less living space being available for local residents and this, in turn, can cause rents to go up. Furthermore, the social fabric and the neighbourhood structure may change because fewer permanent residents and more short-term visitors are present.

That is why German lawmakers responded a long time ago already and imposed bans on, or rules against the illegal repurposing of living space. If a living space is used as a holiday home only for a short period of time in one year then this would normally not constitute illegal repurposing. 

Please note: However, these rules and exceptions vary depending on the Federal State and municipality so that you should acquaint yourself with the local rules beforehand. 

Current ruling on the application of the German Act on the Prohibition of Illegal Repurposing

In a recent publication of court proceedings, the administrative court in Freiburg (decision of 16.6.2023, case reference: 4 K 1365/23) provided an important clarification in respect of the Act on the Prohibition of Illegal Repurposing. This legislation, which is applicable in Baden-Württemberg, defines illegal repurposing as the use of living space to provide accommodation for tourists and other visitors for more than a total of ten weeks in a calendar year. There has hitherto been uncertainty about the interpretation of this limit. The issue was whether or not advertising an apartment as a holiday home for rent in a respective specialised portal for more than ten weeks could already be regarded as a breach of this limit.

The specific case concerned a tenant in Baden-Württemberg who had advertised his apartment for rent on AirBnB. While the apartment was available on the platform for a period of more than ten weeks it was actually used by holiday makers for a considerably shorter period. Nevertheless, the local authority saw this as a violation of the prohibition on illegal repurposing whereupon the tenant instigated legal proceedings.

However, the administrative court in Freiburg ruled in favour of the tenant. The court clarified that the crucial factor for the ten-week limit was not the length of the advertising period but the actual occupancy (use) by holidaymakers. Merely advertising an apartment for rent does not necessarily mean that it cannot also be used for residential purposes. This will then be the case if, in particular, the living space – as in the above-mentioned case – is only rented out to guests while the main tenant is temporarily absent.

Recommendation: For property owners and tenants it is crucially important to monitor the actual length of the rental period rather than the length of the advertising period in order to prevent potential disputes related to the prohibition on illegal repurposing. This will apply not only in Baden-Württemberg, as in the case where there was a ruling, since there are corresponding rules in the other Federal States, too.