Analysis: Latest Update on Balearics Rental Laws

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Editor’s Note: The Balearics have led the way with regulations to control holiday rentals and prohibit owners of apartments from renting them to tourists. Palma-based lawyer Will Besga explains the relevance of a recent ruling fining an owner for simply advertising without a rental licence.

With the arrival of the summer holiday rental season, it is a good time to take stock of the Balearic tourist lettings legislation and update readers on the latest situation. Indeed, the case is never closed, and new details must be added to our knowledge base as the administration and courts work through, and implement, the laws we have been given by our better politicians.

If you have been following my series of articles on touristic and non touristic lets in the Balearics, you will know that a holiday rental (a short term rental with services) can only be done with a licence, and licences can only be obtained for detached houses, semis, and some other types of property (eg townhouses in villages). Other property types (flats, terraces, more than three detached houses in one plot etc) cannot get licences, so the only way to rent them under the tenancy act without services, with a suitable contract and being mindful of how and where you run adverts and with the general logistics of the operation.

Now, if you plan to do a touristic let, it is imperative that even before you actually get to rent your house, that you obtain a licence. A recent case illustrated how important this is.

A few weeks ago there was a court ruling in the administrative courts whereby a property owner was found guilty of engaging in a touristic rentals without seeking the touristic licence to do so. In this particular case, the house (detatched) was advertised with services, it had no licence, and crucially it had not yet got to the stage of being rented out. So you can be fined simply for advertising a tourist rentals without a licence.

This is an obvious ruling, but an interesting one nevertheless, for it solidifies what we already knew, that services are one of the elements that convert a short term rental into a touristic one. Yet is also has important consequences, as property owners can be made responsible for not having a touristic licence even if the house has simply been advertised. This liability also extends to agencies, which can be held accountable for the lack of licences of the houses they have in stock. In general terms, if the agency is based overseas, the target of Turismo will be the property owners. If the agency is local, both the property owners and the agency can be fined.

As you can tell, these issues are complex ones, because of the ambiguity of the law and the many grey areas its application affords. Whilst this should not put you off exercising your constitutional, legal and human rights of disposing of your property as you see fit, you should first clearly understand the implications of renting in the Balearics, so stay tuned for more on this.

2014 © Will Besga, All rights reserved. Spanish qualified lawyer Will Besga studied at The University of Queensland (Australia), The University of Manchester (UK) and The College of Law (UK), and is now based in Palma de Mallorca. You can reach him by email: will.besga@mallorcalaw.com.

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. 2014 © Will Besga. All rights reserved.

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