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🇬🇧 Holiday Rental Laws

3/9/2019 Larrain Nesbitt Abogados


Definition


Over the past two years almost every Autonomous Community in Spain has zealously ruled on what is known as 'viviendas de uso turístico' or private holiday rentals. These are laws which seek to regulate short-term touristic lets from private individuals and bring them in line with minimum (hotel) lodging standards. The laws in all Autonomous Communities are fairly similar so a couple of common denominators can be extrapolated. A touristic let is generally defined by two elements:


• A dwelling that is offered on a short-term rent to tourists employing the media (internet, newspapers, magazines, travel agencies etc.). There is great diversity in the offered lodging and may range from a whole detached villa in a luxurious seaside resort to renting a single room in a Bed & Breakfast Some communities expressly bar the possibility of renting a single room.


• The property is let out one or more times a year for a period that normally exceeds one month i.e. summer lets or winter lets in ski resorts. But they can also be rented for days, weeks or months.


Excluded Properties


In general, properties that meet the following criteria would be excluded from this regulation and would fall under Spain's Tenancy Act (Ley 29/1994, de Arrendamientos Urbanos).


• Property that is lent to friends/family without any compensation (monetary or otherwise).


• Property that is let to the same person/s for a period that exceeds three months in a year.


Rural property which falls under its own regulation.


• Landlords who own three or more properties in the same development or 'urbanización' fall under a different regulation: 'apartamentos turísticos' (not to be confused with 'viviendas de uso turístico' which is the topic of this article).


• No more than fifteen people can live in the same property.


Requirements


Touristic lets, are generally obliged to meet the following criteria which by no means is a closed list (l only highlight the main ones). For an accurate list you should check the touristic rental law of the Autonomous Community where your property is located. Please read further below a region-by region list of approved holiday rental laws.


EDIT October 2016: For the avoidance of doubt, as some people are reportedly getting confused, what follows is a generalisation. I have taken the draft holiday rental law of Andalusia as template to extrapolate generalities or common denominators to be expected from all regions, as regional holiday rental laws in Spain are in fact fairly similar with small variations. Touristic lets are generally obliged to meet certain criteria, though it varies by region, I list the main ones for Andalucia below. If, for example, you are interested in Murcia region, please check the local regional requirements of Murcia's holiday rental law for the minutiae (I do not list them below!).


• The property must have attained what is known as a Licence of First Occupation(also known as First Occupancy Licence, Habitation Certificate, Habitation Licence, Licencia de Primera Ocupación, Cédula de Primera Habitabilidad, Cédula de Habitabilidad or Cédula de Ocupación).


• Full compliance with planning, health and safety, security and disabled access amongst other laws; both at a national and regional level.


• Rooms must be ventilated and have blinds or shutters


• Free internet service available in every room.


• Air conditioning unit in every room (as a fixed fixture, not a portable device).


• When properties are let during the winter season (October through to April) a heater must be made available in every room that is let (as a fixed fixture, not a portable device).


• First aid kit and fire extinguisher.


• Cleaning service at the start of new lodgings.


• Rooms must have adequate furniture,


• Complaints book.


• Touristic guides, maps of the surroundings (books).


Non-Compliance


My advice is that landlords would do well to seek tailored legal advice and determine if their property complies fully with all laws. Failure to comply may lead to stiff fines. Fines range from hundreds to over a dozen thousand pounds.


E.g. Landlord has not applied for a Touristic letting licence from his town hall or the property is unregistered at the special register for touristic properties.


E.g. Landlord is reported because he does not have a ramp built for disabled access.


E.g. Landlord does not have a wi-fi connection set up.


E.g. Landlord has not attained a Licence of First Occupation from local planning authorities.


My Take on Touristic Rental Laws


I had already written an admonitory article back in 2013 (New Measures to Bolster Spain's Ailing Rental Market) on the worrisome trend the Autonomous Communities were following on enacting their own laws to regulate Touristic lettings on the wake of Law 4/2013 which (clumsily) left the door ajar to them.


I feel compelled to excoriate these touristic rental laws which are a bad idea as in the best of cases they impose a new set of obligations (and associated expenses) on landlords which severely impact their rental income and at worst require a rental licence is attained under threat of hefty fines on non cases individuals will not be even allowed to rent as these laws (artificially) stifle competition.


At no time should public administrations limit the rights and usage of private homeowners to rent out their properties. It is a direct attack on private property which in my eyes is a red line that should not be crossed.

This unnecessary batch of new regional laws only make the prospect of renting for small-time landlords - which are legion - all the more difficult (acting almost as a deterrent) whilst at the same time make life easier on large powerful hotel groups as competition is removed. In other words, these regional laws thwart competition in a free market economy benefiting large corporations at the expense of the little people who make a meagre supplementary income by letting property out. The field is uneven.


Two years on, the majority of the seventeen Autonomous Communities which make Spain have jumped on the bandwagon passing legislation on touristic lets. Landlords would do well to seek legal advice on whether their property complies fully with the new spate of regional regulation. Some of these laws (i.e. Balears) require that local authorities issue a rental licence' before you are allowed to let and impose hefty fines on non-compliance. The obligations are (formally) geared to set a homogenous minimum standard to rent property and in some cases require a substantial upfront investment which may negate altogether the very idea of letting as the numbers may not stack up in every case.


If you examine the new requirements landlords are expected to meet they resemble closely those we have come to expect from the hotel industry (i.e. free wi-fi, A/C units, professional cleaning service etc.). It stands to reason you cannot possibly demand from private individuals the same blue-ribbon lodging standards and services as those offered by financially powerful multinational hotel groups. It's daft.


Private individuals in many cases will not have the financial means to acquire all the minimum' gadgets, let alone face the grim prospect of being fined dozens of thousands of pounds on non-compliance. If these regional laws are enforced harshly by authorities it will leave the burgeoning business of private home rentals to affluent people or groups; the only ones with the means to keep up with the frantic pace set out by regional authorities. Borrowing a quote from Thomas Jefferson - "There is nothing more unequal than the equal treatment of unequal people”.


Again the cynic in me asks cui bono? Who stands to gain more from such changes in home rental regulation? Definitely not landlords (or tenants for that matter). The powerful hotel industry does. Property has been let to tourists for decades without major hindrances in fact Spain's whole unbalanced and undiversified economy hinges on tourism and construction; they account for well over 20% of its GDP). Adding red tape is unnecessary and redundant.


Why now? Because after a huge property boom that lasted almost a decade the properties now on offer have trebled whilst demand remains stable. This has in turn dramatically increased competition for hotel groups which has severely dented their bottom line (and miffed their shareholders). They have relentlessly lobbied over the last years to curtail what they deem as 'unfair competition'.


Competition is always good in the broad economy as it drives prices down and improves services not to mention job creation at a time when the economic recovery remains anaemic (in Spain). Competition at its heart is what keeps people and companies on their toes. Remove competition and companies become complacent, services deteriorate and prices soar. In a competitive market bad companies are weeded out by consumers through natural selection. More so in the days of internet with professional bloggers that take delight on rating hotel accommodations for the benefit of all us punters. This is not about accommodating lofty ideals, it's about being pragmatic in today's tough world. A healthy robust economy demands competition to flourish and create jobs, period. Remember my words next time you have to pay for a pricey (hotel) lodging in Barcelona or Madrid.


You can find an insightful article from American journalist Kevin Brass (New York Times, Wall Street Journal) with poignant comments on the matter of (Spanish) administrations encroaching on private short term lettings (for the benefit of the hotel lobby) from the 8th October 2014: Opinion: Attacks on Short-Term


Rentals Are All Hype.


EDIT 9th of April 2015: Spain's Competition and Market's Authority (CNMC) has taken legal action against Madrid's Holiday Rental Law on grounds of "anti-competitive practices that restrict consumer's ability to choose (a service)". More on this: Five-Day Holiday Rental Limit Challenged in Madrid.


Canary Islands: Fairly restrictive. Decreto 142/2010, de 4 de octubre, por el que se aprueba el Reglamento de la Actividad Turística de Alojamiento and the new Reglamento de las viviendas vacacionales de la Comunidad Autónoma de Canarias. Read this post on the new holiday rental law for the Canary Islands. https://www.larrainnesbittabogados.com/article.php?id=81

Larrain Nesbitt Abogados

3/9/2019

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