Tuesday, June 11, 2013

Balls Of Confusion: Tenancy Act

I am indebted to m'learned and good friend Will Besga for having explained in "The Bulletin" on Sunday the all but inexplicable, namely the consequences of reform of the Spanish Tenancy Act for short-term rentals. Will drew a distinction between properties which are or need to be licensed as "tourist" rentals, these being those for which owners offer services and which can be commercialised through open promotion, and properties which are not claimed to be "tourist" rentals, i.e. those for which owners do not offer services and which cannot be commercialised (or shouldn't be) through open promotion, e.g. via the internet, but which are permissible under the terms of the Tenancy Act.

Where I run up against a difficulty with this distinction is in understanding for what purpose, other than tourist, a property would be rented out on a short-term basis. But let's put this almost semantic issue to one side and get to the balls of the matter - its utter confusion.

There is a commonly held view that law in Spain is sometimes drawn up with the aim of creating confusion. Whether this is deliberate or not, if there is confusion, then it is the result of badly drafted law. And if confusion is indeed deliberately sought, then it is probably because laws are designed to so boggle people's minds that they end up doing nothing as they haven't a clue what to think, which is a peculiar philosophy for enacting legislation, to say the least. Alternatively, people do do something, and this turns out be wrong, not because people deliberately flout the law but because they don't know any better and because there is that much confusion that laws are subject to any number of interpretations or misinterpretations placed on them by all manner of agents - the forces of law, governments, the legal profession, other advisers, the bloke in the bar who reckons he knows everything.

The reform of the Tenancy Act should have been, or at least I had thought it was going to be, relatively straightforward, but because, or so it would appear, Madrid has seen fit to specifically only remove regulated tourist rentals from provisions of the act and hand responsibilities for them over to the regional government and so leave be a classification of property that is deemed not to be "tourist", the national government has merely managed to create ever more confusion.

However, some town halls in Mallorca appear not to see any distinction in these short-term rental properties. If they do, then why are they reacting as they are? Take Pollensa's mayor, Tomeu Cifre, as an example. Cifre it was who tried his level best to get Bauzá, Delgado and tourism-law-drafter-in-chief in the Balearics, Jaime Martinez, to think again on the issue of holiday lets. He had sought an exemption for Pollensa because of the town's very high level of private holiday accommodation. He tried but he failed. And now, he is expressing his disappointment at the change to the Tenancy Act.

This is not disappointment at private accommodation that is registered and regulated (because there already is a goodly amount of this) but at that accommodation which isn't, namely the so-called illegal offer, usually apartments. The fact is that, in order to maximise return on a rental property, an owner needs the ability to be able to advertise it. In Mallorca, where apartments are concerned, this has been impossible and remains impossible, except where it is done in contravention of Balearics law.

Cifre is supported in his disappointment by Antoni Pastor, the mayor of Manacor, Antoni Reus, the mayor of Santa Margalida, and Llorenç Suau in Andratx. Pastor and Reus are both members of the awkward squad, Cifre and Suau aren't; their opposition is not based on any anti-Partido Popular sentiment but on the basis of practicality and of threats to local tourism industries.

Apart from certain town halls, there are those business sectors which are fretting over the effects of the act's reform, such as supermarkets and car hire. But there is a far wider fretting going on. In Mallorca, it concerns the sheer volume of rented accommodation (an estimate puts the number of properties at 70,000), of which fewer than 10% are actually properly registered. And in Spain as a whole, there is a fret as to the government, just like the regional government in the Balearics, acting as the puppets of the hoteliers. It, or rather they (national and regional governments) are making an enormous mistake. To the tune of roughly 2,000 million euros of mistake, the overall value of the holiday-rental market.

Any comments to andrew@thealcudiaguide.com please.

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