Fining Airbnb

Apropos the Balearic government having fined Airbnb 300,000 euros, someone said that the fine will never be collected. Someone else agreed. This had been tried in the Canaries, and the courts quashed it.

These two someones are in fact the same person. Technology is wonderful when one has access to certain applications; in this instance, a website back-end administration system. People talk to themselves under different names. It happens not infrequently. Funny old world.

This single-person chat is really a subject in its own right. Let's not detain ourselves by being concerned about it for now. Let's instead consider the Canaries fine, because there has never been one. The real story is that the Canaries High Court has on three occasions issued rulings challenging the Canaries government's holiday rentals legislation; a rather different matter therefore.

The Canaries government has not yielded to the court's rulings. The Supreme Court is to become involved. Legal certainty might therefore be said to be limited in the Canaries; the government had in fact banned holiday rentals in many resort areas. 

The Balearic government, the current government, has not banned anything as such. Rental accommodation, i.e. villas or houses that were legally registered, has been unaffected and will remain unaffected. The government has applied an interpretation of the tenancy act, which had been open to flagrant abuse because of the way in which clearly tourist accommodation (apartments in particular) was being disguised. The Madrid government might have challenged this; it did not.

The banning dates back to 1999. The Partido Popular passed the first Balearic tourism law. From that point on it was definitively illegal to rent out apartments for tourism purposes; the PP's second tourism law (2012) put more flesh on this. People still did rent out because of the tenancy act, but the principle of a ban came into existence almost twenty years ago, and it was introduced not by a left-wing government but by a right-wing administration.

You do hear some real old claptrap, such as the current government being in the pockets of the hoteliers. The PP were so far inside the pockets they were buried deep along with any loose change. That's why the PP failed to regulate in favour of openly marketed holiday apartment rentals in 2012. The PP are now playing political opportunism for all its worth, attacking a government which was left to try and sort out the mess that the PP might have lessened.

And it is a mess. The government's legislation is a mess but only because the situation became messy. And who does one blame for this? The former PP government yes, but the blame lies far more squarely with Airbnb and its ilk and what it has spawned in the years since the PP so lamentably failed to grasp the  nettle that might have prevented a great deal of difficulty for all the apartment owners who had been renting out but were not given the chance to "regularise" their situation when they should have been.

So, the government slaps a fine of 300 grand. Small beer to Airbnb. It might find that it does have to pay, which it didn't when a Catalonia government fine a tenth this amount was ruled out by the Catalonia High Court. The justification for the court's ruling was that Airbnb was merely a digital intermediary that wasn't itself offering a tourist service. The European Court's ruling regarding Uber has changed all that. Barcelona town hall's 600 grand fine of Airbnb may well stick, as will those imposed by other administrations in the EU.

Airbnb operates as though rules don't or shouldn't apply. It has accepted that there were properties in Mallorca without the necessary licence registrations on its website. Why should it worry? It can afford the fine but will do all in its power to avoid paying it. As for poor owners who find themselves being fined in Barcelona, what does Airbnb do? It hooks up with an online legal advisor to help these owners, which is very kind of the website but also a tacit admission that there are legal cases to answer.

Have you heard the one about the single "owner" in Ibiza who markets 500 apartments for holiday rental? You haven't. It was reported on in an Ibiza paper the other day. This is a business, one indicative of the speculation that the virtuous Airbnb has facilitated. The true small owner, the one who was renting out in a somewhat dodgy fashion for years before Airbnb came along, is the one I feel sorry for; not those who have emerged in recent years and are wholly distorting the market for accommodation. That true small owner has been caught out by the Balearic legislation, but don't blame the government. Control had to be applied. People have to live somewhere.

Whether the fines are ever paid, who knows.