The Rentals' Panic

Panic. This might be one way of describing it. Despite the provisions of the holiday rentals' legislation having been known about for weeks in advance of the law's enforcement, only now is the reality kicking in.

An alternative position is that things will calm down and the government won't act in as draconian fashion as it appears to be. This attitude is wishful thinking. The Aptur holiday rentals association is under no illusion. Remove ads for short-term apartment rentals on various websites immediately. Don't even think twice.

Puerto Pollensa, as we all know, stands to be greatly affected. But so also do Alcudia and the other bay resorts. Consequently, there is a great deal of chatter on social networks dedicated to the different resorts. And some of it is highly misleading, while the "keep calm, it'll sort itself out" message only clouds the situation. Listen to Aptur, it is an association which knows exactly what it is talking about. Follow its advice; no one else's.

I'm afraid that the misleading content persists in, for example, saying that an owner will be ok if an apartment has a licence. How many more times does it need saying? There is no such thing as a licence to rent out a private apartment to tourists. There never has been and the chances of there being licences in the future are, in my opinion, fairly low.

Once the zones for new holiday rentals are determined, my guess is that there will be only a limited number of licences available for the coastal areas of the two bays. Although it hasn't stated this, the government (and Council of Mallorca) will prefer to have zones for licences away from the coasts and thereby give a boost to tourism in the island's interior. It can't state this as specific policy in law, because if it did, it would run into the same problem that emerged in the Canary Islands. The regulations there were that rentals could only be licensed a certain distance from the coasts. A court told the Canarian government that it couldn't apply this because it was a breach of competition.

So there is, I'm afraid, a great deal of uncertainty as well as panic. Meanwhile, there is evidence of one-time holiday rental apartments being re-marketed as long-term rental, which is and always has been perfectly legitimate. There is talk of apartments being offered for a minimum of a month only. This gets round the 30 days minimum period in the legislation, though how practical it might prove to be is debatable. Moreover, even with a month-long minimum rent, an apartment still couldn't be openly marketed as being "touristic". Only if a licence is issued at the end of the current twelve-month moratorium for all new holiday rentals' licences would it be possible to market the apartment in this way. And much, indeed everything, will depend on the Council's zones, which is before one gets to issues such as standards required by the tourism ministry, individual meters, communities' rights of veto, licences of only five years duration that presumably would have to go through a process of renewal. Plus, there will be the cost to register an accommodation place - 2000 euros, it would seem.

I understand that some agencies are considering taking enquiries from known customers. They would then act as intermediaries with the property-owning clients. Nothing would be advertised, but the short-term renting would continue, until, that is, the inspectors find out.

A black market would therefore flourish (if flourish is the right word). Lets wouldn't have to rely on sites like Airbnb because of portfolios of clients that have been built up. It would be a risk, but one that some may wish to take. Let's hope they don't get dobbed in by a neighbour.

The notion that many of the short-term lets will become long-term rentals is not one that "experts" in the real-estate market subscribe to. Yes, there will be some, and there already are, but one can appreciate the logic that there wouldn't be a whole load: apartments were bought for holiday let purposes. These experts believe that the main options will either be the black market or selling. A sudden flood of apartments on the market? You can probably guess what that might mean for prices.