Monday, June 19, 2017

Madrid's Holiday Rentals' Interference

There was a post on Facebook, someone saying they were thinking of buying an apartment and renting it out. One presumed that this would be for tourist rental, and comments that followed reinforced this. There was reference, for example, to a tourist licence, something which does not exist, except in certain limited cases.

A peculiarity of accommodation classification in Mallorca is that there is the odd apartment block that is licensed. The classification system is such that there is a category of tourist apartments, which normally refer to accommodation which is only for tourists. This category of accommodation is often operated by hotel chains, though not always. The key point is that it is not also residential. However, there is, as I say, the odd exception, which arises principally from the history of the accommodation. In the case of one such block in Alcudia, this goes back more than forty years. It is a mix of residential and tourist, and this mix is perfectly legitimate.

So, the mere fact of there being apparent exceptions serves only to add to the confusion regarding apartment rental. But exceptions or not, overwhelmingly the law should mean that there is no confusion. There is no such thing as a tourist licence for apartments, and there never has been. So, when I read the Facebook post, my reaction was to be very careful, especially in light of the legislation that is about to come on to the statute book.

Personally, I think anyone currently contemplating buying an apartment in order to rent it out to tourists needs their head examining. An almighty headache could ensue, to say nothing of the fines. The main reason for thinking this is the way in which the government intends dealing with the tenancy act loophole. But as previously noted, will the government gets its way on this?

Madrid's intervention the other day, by which the ministry for economic affairs queried certain provisions in the Balearic legislation, was described as political interference by the regional government. Was it? Well, no. The regional government does have a great deal of power to come up with its own tourism legislation (and indeed other legislation), but this cannot countermand national laws. The tenancy act is one such.

While Biel Barceló seems convinced, having taken legal advice, that any let for less than one month will be treated as a tourist let (unless the owner can prove otherwise), Madrid was signalling that he may not be able to apply this. The fact is that there is only direction in which the legislation is heading - and that is to the courts. Madrid might apply an appeal to the Constitutional Court, while one fancies that the likes of Aptur will most certainly want our learned friends to issue rulings. If the courts get involved (not if, when), there will be yet more legal uncertainty that could drag on for months or even years. Meanwhile, there will be people thinking they'll buy an apartment for tourist rental. Crazy.

The courts have already been active in ruling against Canary Islands legislation in respect of zoning, and they may also be asked to intervene in Andalusia. The equivalent of Aptur in Andalusia wants the regional government to amend its legislation, but the government is standing firm. The main aspects it wants amending include the fact that in certain major tourist resorts, such as Marbella, no licences can be issued.

Back in Madrid, the Supreme Court has made a ruling that will be looked upon favourably by the regional government. The court has supported a decision of the High Court in Catalonia which forces websites to only publicise tourist rentals which have a registration number (the Balearic legislation envisages this). HomeAway appealed this decision, but the Supreme Court has found in Catalonia's favour. The precedent could well prove to be very significant. The general secretary of Cehat, the Spanish Hoteliers Confederation, has described it as "very important and the first step in putting an end to the underground economy".

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