Balearic Government working on restrictive new holiday rental law to address massive problem of illegal rentals

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There are an estimated 50,000 illegal tourist rental apartments in the Balearic islands, which the regional government is struggling to sort out with draft regulations that are causing tensions, reports the local paper El Diario de Ibiza.

Whether you are in favour or against holiday-rentals, a situation in which such a large number of owners are doing something illegal can’t be ignored any longer, so the regional government of the Balearics, known as the Govern, promised to come up with new regulations to sort out the problem.

As things stand it is impossible to get permission to rent out a apartments to tourists in the Balearic islands of Mallorca, Menorca, Ibiza, and Formentera, which is why so many owners do it illegally. Tourism is big business in the islands, and many owners need the extra income they get from holiday-rentals, especially in times of crisis.

But the Tourism department, run by Gabriel Barceló, head of the Més Per Mallorca party in the left-wing governing coalition, is having a tough time reconciling competing interests, explains Alberto Magro, writing in the Diario de Ibiza. “After ten months avoiding the question that will define his term, he has put in motion a process to regulate [holiday-rentals]” says Magro. Drafting the new regulations is causing a lot of friction. “There is tension in the tourism department. A lot of tension.”

The powerful hotel lobby is dead against holiday-rentals, which it sees as unfair competition. The lobby has “all its heavy artillery ready to fire on the Govern, if it decides to fulfill its promise,” explains Magro.

The green lobby, influential in the Més per Mallorca party, is in favour of restricting tourist rentals to reduce the growth of tourism in the region, which it sees as damaging the environment. On the other hand, many members of Barceló’s party depend on income from holiday-rentals, so there are competing interest within his own party. The governing coalition also relies on support from Podemos, the new far-left party, who are in favour of “draconian restrictions,” says Magro.

DIFFICULT BUT NOT IMPOSSIBLE

So Barceló is under pressure to legalise tourist rentals and discourage it at the same time. His likely strategy, explains Magro, will be to make it difficult but not impossible, by asking almost the same level of service as hotels provide, and by restricting the types of flats that can be rented to tourists, in certain areas, at certain times. “You won’t be able to rent everything to tourists,” says Barceló, quoted in the article.

The requirements being considered include aircon, heating, furnishings, the ratio of bathrooms to bedrooms, cleaning, a user-manual in three languages, a complaints book and 24-hour helpline. The new regs will also have to tackle the question of room rentals, which are currently illegal.

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Palma de Mallorca

Along with not issuing any new licences for tourist apartments, the current regs have more than 50 requirements, including a civil responsibility insurance policy of at least €300,000, which is one reason so many property owners in the Balearics rent their homes illegally.

Another reason is that very few get prosecuted for doing so. The authorities currently investigate cases only when there is an official complaint, called a denuncia in Spanish, usually from a neighbour. Just 30 fines were issued last year, thought that has risen to 53 so far this year. Magro reports they are starting to investigate illegal rentals without complaints, but on current trends that still means just just 180 fines this year, out of 50,000 illegal rentals.

So they are going to make holiday rentals as difficult as possible, but also legal. Will that solve the problem of 50,000 illegal tourist rentals? And if a few people get picked on, whilst the vast majority don’t, surely it makes the law enforcement seem arbitrary?

The article also explains that some owners avoid problems by using portals like idealista and fotocasa that don’t focus on holiday rentals, and use special rental contracts that avoid the appearance of tourist activity, so they don’t attract the attention of the authorities.

The Balearics isn’t the only region grappling with the challenge of tourist rentals, which restrict the supply of housing for locals, drive up rental prices, and cause friction between residents and tourists, say its detractors. Those in favour say the state has no right to restrict property rights and deny owners a legal income from their property, especially at a time like this. Barcelona, for example, has essentially banned holiday-rentals for anyone who doesn’t already possess a licence.

Comments

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One thought on “Balearic Government working on restrictive new holiday rental law to address massive problem of illegal rentals”

  1. Profile photo of Mark StücklinMark Stücklin Post Author

    This comment sent in by email:

    Like it or not tourism is the main income generator for the Balearics and without it many businesses would fail along with associated tax receipts and increased social security payments. Many visitors prefer the independence of private apartment and villa rentals and would not necessarily choose a hotel instead. Larger families and small groups of friends would find Hotels exorbitant costs unacceptable and simply go to other Mediterranean resorts. Many apartment an villa buyers will be put off or even sell up and leave if they can’t fill unused weeks with income from tourists. This could cause a crash in the price of property and collapse of new building projects just as this was recovering. The Balearics government should be careful not to kill the goose that lays the golden egg.

    Graham.

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