Illegal short-term letting is a widespread and growing problem in major Danish cities. This phenomenon undermines hotel competition and puts pressure on the housing market. A recent significant ruling in this area provides some guidance on the otherwise untried legal regime.
The case concerned seven residential leases let by City Apartment A/S to Dehn-A ApS. Dehn-A ApS had systematically and consistently offered these leases on “hotel-like terms” via the Booking.com website. This was despite year-round residency being agreed. City Apartment A/S proved to the court that no one had registered their residency at the properties. On this basis, the Copenhagen City Court ruled that this behaviour constituted a clear material breach of the lease agreements and the requirement for year-round residential use.
Consequently, the court ruled in favour of City Apartment A/S, deciding that, as landlord, City Apartment A/S was entitled to terminate all seven leases with immediate effect. Dehn-A ApS was therefore ordered to vacate the premises immediately without notice in accordance with section 182 of the Danish Rent Act. The judgement was handed down on 21 August 2026 and is still subject to appeal.
More specifically, the ruling shows that:
The ruling comes at a time of considerable political and industry focus on the phenomenon of “shadow hotels”. Industry representatives have long requested political action, claiming that “shadow hotels” distort competition by evading mandatory hotel regulations and damage the overall housing market by removing the properties from the general residential rental market. Furthermore, short-term leasing undermines legal regulations on cost-based rent by charging significantly higher rent than would otherwise be permitted for leases subject to the regulations – one example shows a short-term lease with a rent as high as 14 times the monthly rent.
Appropriately, the fight against “shadow hotels” is enshrined in the new government’s policy framework, and the Minister for Urban and Rural Affairs and Transport, Signe Munk (Green Left), recently emphasised the desire to go further than the current political agreement in this area. While the specific proposed regulations have not yet been made public, the industry is demanding a national register of short-term leases advertised on platforms such as Booking.com and Airbnb. According to the industry, the current legal position remains insufficient and generally uncertain.
Meanwhile, commercial landlords should be mindful of their tenants’ intentions and how the premises are actually being used, particularly when letting several properties to the same tenant. Although letting multiple properties to a single tenant provides the landlord with stable rental income and reduced administrative burden, it may also increase the risk of non-compliance with the year-round residence requirement. The more properties a landlord lets to a single tenant, the more difficult it becomes to counter this risk.
Under the Danish Housing Conditions Act, the owner of a property designated for year-round residential use in the local plan must ensure that the property is used for this purpose. If the property remains vacant for an extended period, the property owner must report this to the municipality, which may, as a last resort, assign a tenant to the property.
A residential property is considered “vacant” when it is neither let for nor used for residential purposes, meaning that these measures apply in principle to landlords who let their residential properties to commercial tenants who, in turn, use the properties for short-term letting without fulfilling the year-round residence requirement.
The court’s ruling confirms that landlords may monitor the use of their properties and take action against short-term subletting in breach of contract, including by terminating the lease. The ruling provides landlords with long-awaited clarity on the measures available to address this issue.
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