Minister of Economic Affairs Erkki Keldo said the associations' concerns are understandable, but any restrictions must be approached cautiously because private property is inviolable.

The union proposed this week that apartment associations be given the right, through a general meeting of owners, to prohibit renting out apartments. The decision would require more than half of the votes and more than half of the co‑ownership shares — a qualified majority.

"Rental relationships play a major role in the daily life of an apartment association. More and more associations have turned to us because they are unhappy with what is happening in rental apartments that are offered short‑term through various platforms," said Urmas Mardi, board member and head of the union's legal department.

He said constantly changing strangers treat shared property carelessly, make noise, ignore waste‑handling rules, smoke wherever they want and park their cars however they please.

"There have also been cases where co‑owned property has been damaged — for example, a late‑night guest arriving at a rental unit smashed the front door glass with a brick after failing to find the key. Other residents do not want to pay for damage caused by a short‑term rental operator," Mardi said.

The union presented its position to the Ministry of Economic Affairs, which earlier this summer completed a draft plan to amend the Tourism Act, aimed at organizing the short‑term rental market. The current law does not separately regulate short‑term rentals, even though the market share of guest apartments is steadily growing.

According to Mardi, associations in attractive tourist destinations are in the most difficult situation. In some buildings, only a few apartment owners live on site, while the rest are investment units. In such cases, permanent residents find it almost impossible to improve their building, because other owners simply are not interested.

"The value of the homes of resident owners also decreases when the building becomes a kind of passageway full of strangers instead of a home. This can create a trend where permanent residents give up, move away and the entire residential area changes," Mardi noted.

The union believes rental regulations must be carefully analyzed, because entrepreneurial freedom is a fundamental right and restrictions must be proportionate. At the same time, people also have a fundamental right to feel safe in their homes and to rest.

The union also pointed to practices in other countries. For example, in Spain, since last year, an owners' association may approve or restrict short‑term tourist rentals with at least a 3/5 majority. In France, tourist accommodation can be prohibited under certain conditions with a two‑thirds majority.

Workable solutions must be found

Minister of Economic Affairs Erkki Keldo said he understands the concerns of apartment owners and associations.

"If short‑term rentals bring noise, constant guest turnover or other disturbances, people must be able to protect their peace at home. No one should suffer because the use of a neighboring apartment clearly disrupts daily living conditions," Keldo said.

He said workable solutions must be found, and associations should be given better tools to deal with specific disturbances when necessary.

At the same time, restrictions must be approached very carefully. Keldo said most apartment owners use their property responsibly, and isolated problematic cases should not lead to limiting everyone's rights.

"A person must have the right to decide whether they live in their apartment, rent it out long‑term or use it in some other lawful way. It is not the state's role to decide how an owner must use their property if it does not violate others' rights," the minister said.

Keldo added that the inviolability of private property and the right to use one's property are cornerstones of a free society.

"If the state begins to restrict that right, there must be a very clear and weighty reason. Restrictions must be the last, not the first solution. Private property is sacred and must be protected," Keldo said.

Income goes to the owner, but the impact affects all residents

Short‑term rentals are also a concern in Pärnu. Deputy mayor Sander Kilk believes apartment associations need expanded decision‑making power over the provision of accommodation services and the distribution of related costs.

"In an apartment building, the impact is borne by permanent residents, the income goes to the unit owner, and the association currently has no effective lever," Kilk said.

Pärnu's distinct feature is strong seasonality: in summer, apartments are heavily used for short‑term accommodation, but outside the season they often remain empty. According to Kilk, this may not support the city's overall development, as community cohesion may weaken, local services may decline and problems may arise with heating and maintaining unused apartments.

He referred to a recent applied study showing that growth in short‑term rentals reduces the supply of long‑term rentals and increases housing prices.

"The impact is greatest in areas attractive to tourists. Therefore, in Pärnu this is not an abstract future risk but a question of the local living environment and housing market, and the state's own commissioned study has already identified it," Kilk said.

He stressed that Pärnu does not seek to ban short‑term rentals, but wants to find a balance between tourism, entrepreneurship and year‑round living conditions — and for that, legal and economic tools are needed. Where seasonal accommodation concentration begins to harm residents' interests, there must be a way to regulate the situation.

Thus, Kilk said owners' motivation to rent out apartments long‑term should be increased, and suitable incentives created.

The deputy mayor proposed defining in law that renting an apartment for up to 60 nights per year counts as sharing economy, but renting it out more than that constitutes economic and professional activity.

Kilk also wants single‑bed accommodation providers to be required to submit statistics, because most operators in Estonia are small‑scale. Under the current threshold, he said, the part of the market most important for housing policy, tourism planning and security considerations is left out.

He emphasized that Pärnu does not seek to restrict short‑term rentals or impose new requirements on any market participant, but wants the same rules to apply to the same service, while people who occasionally rent out their home should remain exempt.

Interior Ministry wants access to guest data

The Interior Ministry considers it important that the obligation to register accommodation users apply to all providers, and that providers share this data with security agencies upon request.

Ott Aarma, adviser at the ministry's law‑enforcement and criminal procedure department, said this is necessary for threat prevention: it is important to know who is staying at an accommodation facility, regardless of the form or platform through which the service is offered.

"If someone is a wanted person — usually dangerous to themselves or others — we must be able to locate them within the same 24‑hour period. To know where they are, such an obligation is necessary. And given how much of the market new accommodation providers now make up, this is a significant part," Aarma said. "Otherwise, people who do not want to be found will simply use only those services."

Currently, hotels mostly use paper cards where guests write down their information. Aarma said a more efficient solution would be a central portal where service providers enter guest data and where authorities could check information automatically.

"Then we can compare it with our list of wanted persons — both those wanted by police and others. And if we get a response that yes, this person is at accommodation X, we can act. That is the reason," Aarma said.

According to the draft plan, the Ministry of Economic Affairs wants to organize the short‑term rental market so that regulation is simpler, clearer and easier to implement, without creating disproportionate administrative burdens for the state, municipalities or businesses.

The ministry hopes to send the draft for approval in the last quarter of this year, with the expected entry into force next year or the year after.

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