The Balearic Government recently published a new draft law for tourist rentals on the islands. Palma-based Spanish lawyer Will Besga explains the proposed changes and what they mean for owners in the Balearics who rent out their homes to tourists.
There’s no escaping the fact that an increasing amount of tourist accommodation offered in the Balearics is made up of private tourist rentals, where owners of houses, flats, semis and townhouses compete against hotels for the provision of holiday accommodation.
Which is why the Balearic Government, under pressure from the hotel lobby, introduced the confused and confusing Balearics Tourism Act in 2012, which to a large extent regulates the rental market in the Balearics. Given the large number of tourist rentals in the region, it’s not surprising that any changes in the legislation or the policies of the Touristic administration are watched by many with interest.
Indeed, the Balearics Tourism Act was responsible (and still is) for the confusion that it created, as it seemed to ban short-term apartment rentals to holiday-makers. However, this is not the case, as short-term rentals to holiday-makers offered without services such as cleaning, that avoid advertising in touristic channels, can still be done legally on the strength of the Spanish Tenancy Act. Naturally, care must be employed to ensure that short-term rentals offered on the basis of the Tenancy Act do not cross the line and fall foul of the criteria that defines touristic rentals (the offering of compulsory services etc).
During the summer months a draft of a decree fleshing out and defining many aspects of the Tourism Act was distributed to some players in the (touristic) industry, and I had a chance of reading it. The decree regulates many aspects of the industry (hotels, touristic companies, etc), but the ones that are important for our purposes here are the ones dealing with touristic rentals. So what are the changes, if any?
In reality, and in short, whilst there are a myriad of details, there are only a handful of relevant changes. So here we go with the most significant.
First, a new category of property has been added to the list of categories that need licenses to engage in tourist rentals, namely ‘Town Houses’. These are properties that are not detached, which have another house to either side or both, that sit in their own plot, and that were built before 1960. Now this type of housing can also engaged in touristic lets with a licence.
Along with the new category, and only in regard to semi-detached properties and analogous ones (but not detached houses), there is now the requirement that, in the application for the license, there must be a statement that the constitution of the community does not ban touristic lets, and, if these statutes have not yet been approved, that your neighbour does not oppose them.
Similarly, in regard to the town houses that I have just described, there is now the requirement of presenting, together with the license application, a signed declaration from the neighbours which states that they do not oppose touristic lets.
Lastly, in order to engage in touristic lets, companies must take insurance out for a minimum of 300,000 euros to cover for the different possible responsibilities that may be had.
Let me recap briefly:
A. Detached, semis, analogous situations and certain townhouses (own plot, predating 1960) can all now get licenses. This is less restrictive than before, where town houses were not contemplated.
B. Semi detached houses: in the license, there must be a statement that the community rules do not ban touristic lets. If there are no rules, that your neighbour does not oppose them. This, in reality, was something that had been implemented by the administration for some time and, whilst it may seem restrictive, think about it: a community of owners implies a consensual set of relations. When these communities are built, the owners get together and work out a number of basic rules. Declaring, therefore, that the rules of the community do not oppose, or your neighbour does not oppose your touristic lets is not a step in a different direction, but rather a continuation of the type of consensual interaction.
C. Town houses: signed statement that your neighbour/neighbours do not oppose you engaging in touristic lets.
Detached houses, naturally, do not need any kind of statement or consent from nearby neighbours and are regulated as before.
In sum: this draft adds detail to the Tourism Act, but does not change the status quo significantly. Nevertheless, if you are engaging in this type of rentals, it is important to be in full possession of the facts, so stay tuned for more.
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.