The Homeowners Associations’ power over touristic rentals

By MenorcaSol

Tourism is obviously a great growth opportunity, but the boom in property rental for touristic purposes has turned into one of the main concerns of homeowners associations and local governments.

The lack of control over short term rentals of touristic dwellings allowed the increase of long term rental prices and it forced many local residents out of their homes.

The increasing need to regulate this situation led the Spanish government to take action. However, tourism matters are responsibility of each Autonomous Community and urban planning of each Municipality, so the only way the government can regulate touristic housing is by reviewing the law. In this case, clarifying the definition of ‘seasonal rental’ in the Urban Rentals Law and giving more power to homeowners associations through the Horizontal Property Law.

Although law reforms are full responsibility of Spanish government entities, it has been announced that changes will only be made with the consensus of all parties involved: Autonomous Communities, municipalities, homeowners associations, relevant online platforms, hotel owners and unions.

For this purpose, the Ministry of Tourism has recently addressed the 17 Spanish Autonomous Communities and the Spanish Federation of Municipalities and Provinces with a proposal to review the Horizontal Property Law, that currently states that it is necessary to have consensus among all owners to make important decisions or change the homeowners association bylaws.

If the change in the law is accepted and implemented – and it seems that there is a general agreement among the autonomous governments – homeowners associations will have more decision power as it would bring the number down to a majority of three fifths of the owners (that represent three fifths of the total property area owned, which is the actual criterium used by this law) needed to, for example, forbid the touristic rental of dwellings in their building/ community. At the moment, as long as the existing community bylaws are respected, the homeowners associations cannot prevent each owner to rent their property, because their own vote will hold back the consensus. The Spanish government has also proposed to change the Urban Rentals Law, limiting seasonal rentals to periods of minimum 7 consecutive days, not exceeding a total of 45 days per year. However, there is still no consensus among all those involved on this issue.

Also to help the autonomous communities control touristic rentals, and to offer legal security to both property owners and the people renting, it was suggested the creation of a national registry of all housing for touristic use. This registry would make it compulsory to identify the people renting and also make sure homeowners comply with their tax obligations.

If you need more information about the Tourism Law and holiday rental, do not hesitate to contact us. We advise, defend and represent our clients at all levels. Our greatest asset is an infrastructure of professional leaders in each field of action, especially Real Estate and Tax, as well as our international vocation and multilingual capacity.

0
Holiday rental law decree

By MenorcaSol

The Government is finalizing a law decree requiring internet portals to report owners and income. These must comply with the Public Safety Act and report on who is staying at their properties.

The Internet portals should inform the Tax Agency of who owns the tourist homes that appear on their websites and what the income they receive. In the same way, the state security forces must be informed of who the people are staying in them.

These measures are intended to increase control over tourist rental, improve security and crack down on tax fraud.

The association of the tourist rental Aptur-Baleares and the electronic portal Airbnb announced yesterday that they will work together to promote Balearic Islands as a sustainable tourist destination.

It is well known that the boom of tourist rental of apartments has recently experienced an unprecedented development in the Balearic Islands. The tourist towns of the Balearic housed inside thousands of properties intended for that purpose. Palma leads the statistics in terms of number, 3,715 in total, followed by Pollença and Alcúdia.

mallorca-tourism-tax

This data may change with what is known as zoning established by the tourism law. May not be marketed tourist stays in areas declared eligible (with administrative certificate). The zones will be determined in a motivated way by the Insular Councils, following a mandatory report from the Town Councils, except Palma City Council that will decide without need of the Insular Council of Mallorca.
While not zonifique the license application is paralyzed through DRIAT. The maximum term of 1 year is established, that is to say, until August 1, 2018 to proceed to zoning; if after this period the zoning has not been established, declarations will be requested to initiate activities regarding detached single family dwellings, single family dwellings between medians and single family dwellings.

During the past year, the holiday rental managed by the big platforms left in the Balearic Islands 900 million euros. The latter consider tourist rental on the islands not only generate benefits for traders and owners of flats and apartments but has also diversified supply generating activity in areas not noticed so far the effects of the tourism industry.

2
A review of the Balearics Tourism Law

By MenorcaSol

At the beginning of the month the moratorium for the granting of new tourist rental licenses came into force after the text of the amendment to the Balearics Tourism Law was published in the BOIB, after having been approved by the full Parliament on the 18th of July.

The amendment makes special reference to two questions:

-regulation of the commercialization of tourist stays in housing.
– the establishment of a real roof of tourist places.

The Government of the Balearic Islands has sent a letter to all public administrations that have a registration to inform the public that no new declarations can be submitted responsible for starting the tourist activity (DRIAT) until the insulars “consells” and the City Council of Palma establish the areas suitable for this economic activity.

The new tourism law that has entered into force declares those responsible for infringements related to the sale of tourist stays in illegal housing to property owners as well as to potential exploiters and marketers. The law introduces a modality called “main housing rent”, when the commercialization is carried out by the same owner in its main dwelling for a maximum period of 60 days in a period of one year.

tourism-mallorca

General requirements for residential tourism marketing

  1. Can be marketed short-term tourist stays in residential homes always carry out this marketing proprietary or made by operators or any of tourism marketing channels, on the terms set down by law.
  2. You can only carry out the activity of commercialization of tourist stays in dwellings if it is done in residential dwellings that have the habitability certificate in force or the corresponding title.
  3. Only new tourist commercialization of residential housing can be carried out that are located in areas declared expressly suitable.
  4. It’s not possible to commercialize tourist stays in any house with respect to which a firm sanction is imposed for serious or very serious infraction of the urban legality, as long as this legality is not restored.
  5. The residential houses that are the object of tourist commercialization have to prove the sustainability by obtaining the energy certificate that is determined by regulation.
  6. The houses that are subject to tourist commercialization that present a responsible declaration must have the systems of control of the consumption of water that are determined by regulation. In addition, they must be provided with individual meters with respect to other energy supplies linked to the dwelling, such as electricity or gas.
  7. You can’t touristically subject to market any residential dwelling or has been subjected to official protection regime or appraised price.
  8. The marketing person must meet all regulatory requirements requiring activity include: requirements that may be demanded for exercising business activity;the labor law, if you have hired staff;and tax-related requirements contained in the specific regulations.
  9. The marketing of tourist stays person must submit to the Directorate General of Police information concerning the stay of the people staying in them, in accordance with the rules of public safety.
  10. Users hosted people have to meet the applications of coexistence and public order and in cases of horizontal property, the internal rules of the homeowners where the property is located.
  11. The stays that are commercialized tourist must consist in the temporary assignment of the right of enjoyment of the totality of the house by short periods, understood like stays by days or weeks, without a stay can be more than one month.
  12. The tourist stays regulated in this chapter are incompatible with the formalization of contracts by rooms or with the coincidence in the same house of users who have entered into contracts.
  13. The companies that sell tourist accommodation in residential dwellings must sign an insurance policy that covers civil liability and, in the case of houses subject to the horizontal property regime, to cover any damages that may be caused by users to the owners community.
  14. The residential dwellings in respect of which the responsible declaration is presented in order to start the activity of commercialization of tourist stays must have proven the minimum seniority that is determined by regulation.

Do not hesitate to contact us to have more information related to the tourist rental in Mallorca.

 

2
Tourism law, Balearics case

By MenorcaSol

The number of foreign tourists that visited the Balearic Islands in the first six months of the year exceeded 5.4 million, 8.5% more than in the same period of 2016, these are the latest data released by the National Institute of Statistics (INE). These data lead us to consider the current situation of the much-discussed Balearic Tourism Law.

The largest number of foreign tourists who traveled to the Balearics in the first six months of the year came from Germany, 36%, and the UK, 29.5%. The main emitting countries were the United Kingdom, with almost 8.6 million tourists and an increase of 9.1% compared to the first six months of 2016; Germany, with about 5.5 million, 9.6% more, and France, with more than 4.7 million, an increase of 4.9%. In addition to all this, it’s well known that relations between Spain and Russia enjoy very good health which means an increase of Russian tourists to our country. Every year over 1.5 million Russians come to spend holidays in Spain and most of them choose Mallorca.

mallorca-rental-properties

On July 18, the new Tourism Law was debated and voted on in the Balearic Parliament, which will take effect next week. In the same way, a decree law will be approved that will correct it to allow apartments leased to tourists, but this option will remain prohibited until the insular councils and Palma City Council determine in which areas and under what conditions it is authorized.

The Ministry of Tourism emphasizes the need to enforce the law, especially the large marketers, internet platforms and real estate, in clear reference to the legal uncertainty that until now allowed vacation rental housing in multi-family buildings sheltering in the state leasing regulations despite being prohibited by the Regional Tourism Law. Rental platforms that advertise homes for short leases without the mandatory authorization number and market unregistered flats or houses may be fined up to 400,000 euros.

As soon as the new law comes into force, a moratorium on new places will also be implemented until island councils and the Palma City Council decide which rental modalities are accepted in each zone.

2
The price of housing in the Balearic Islands keeps going up

By MenorcaSol

Data from recent statistics cast the following conclusions: The average price of second-hand housing in the Balearic Islands has increased by 1.2% in May compared to the previous month, bringing the value to 2,108 Euros per square meter.

  • This figure is 25.5% above the average in Spain.
  • Balearics are the fourth most expensive autonomous region in Spain, only behind the Basque Country, Madrid and Catalonia.
  • The price of new housing in the Balearic Islands has risen 3.1 percent in the first quarter compared to the same period of the previous year.

Balearic Islands are in the spotlight of foreign investors looking to buy a property in the Islands. Last year, the volume of transactions by international buyers exceeded 1,600 million, which implies a 50% increase over the last two years. Luxury properties are the most sought after by European buyers, more interested in buying rather than renting, which has caused a significant increase of the average price so far this year in different areas of Mallorca.

Citizens of Scandinavian origin are playing a very active role in this situation. They have focused on Mallorca to acquire a holiday home, which reaffirms the trend detected by the registrars during the last months of 2016.

foto-banner2

Mallorca is popular among the Swedes, and the question is, why? Their fascination for the island is relatively recent and is based on various aspects: the weather, the strength of the Swedish currency (1 euro is equivalent to 9.6 crowns) and the shortage on the real estate industry in this Scandinavian country, which makes it almost impossible for its citizens to acquire a house. Factors that together have caused overwhelming buying and selling. Among the top areas in which the Scandinavians are acquiring properties, highlight goes to Palma center, the old town and various municipalities of Serra de Tramuntana.

Furthermore, there is a neighbourhood in the centre of Palma targeted by every Swedish who wants to invest in Mallorca: Santa Catalina, known as “little Sweden”.

If you are interested in buying a property in Mallorca please do not hesitate to contact Ripoll&Mateu Solicitors Mallorca.

We’re specialists in Real Estate Law in Mallorca and we offer comprehensive advice on the process of buying and selling property.

0
First sanctions on holiday rentals

By MenorcaSol

Last April, the Balearic Islands Tourism Agency Board initiated the Inspection Plan for the accommodation offer focusing its efforts on controlling advertising and illegal commercial offer of holiday rentals in private housing.

With this, the offers published on the Internet are specifically controlled by verifying data that points to an activity outside of the tourism regulations. In addition, the Balearic Islands Government announced joint actions with other public administration offices, such as the national and regional Tax Agencies.

As a result, the first holiday rental inspection campaign in the Balearic Islands produced sanctioning actions to eight real estate companies with fines for commercially offering illegal holiday rentals.

The current tourism law prohibits the sale of touristic stays in dwellings located in residential buildings and at the same time it modifies the rental regulation considering the possibility of offering touristic stays in residential buildings, if a series of requirements are met and whenever it is done in the authorised areas.

And the fact is that the Balearic Islands are beating all records of visits recorded to date. Hospitality companies and holiday rentals search engines reflect a 90% occupancy until October. The same happens with licensed holiday rentals, where the average price for overnight stays doesn’t go lower than 800 euros.

palma-old-town

To deal with the above, in July a new law will change the holiday rentals to tourists in the islands and it will contemplate the following stages:

  • The properties that are already registered with the Tourism Agency may continue to be rented as before, complying with the same rules and maintaining the same sanctioning regime.
  • The apartments located in residential buildings will still not be able to be rented to tourists or commercially offered through touristic channels.
  • The apartments located in residential buildings whose owners want to rent legally should wait for the zoning and also meet the requirements set by the new law.
  • Villas or semi-detached villas can be rented to tourists, if meeting minimum requirements and if obtaining an authorisation from the Tourist Agency in advance. With the new law, the owner must present a document from his city council that proves that his property is located in an area authorised for holiday This process is the same that must be done for apartments located in residential buildings.

Faced with this type of situation, we recommend that you always search for the help of legal experts on holiday rental and completely legal local companies so that you can make use of