Owners Beware: Holiday Rentals' Legislation

So, on Tuesday the Balearic parliament finally got round to debating the government's long-awaited holiday rentals' legislation. The debate took four hours, after which the amendments to the whole of the bill that had come from the Partido Popular and El Pi were booted out, as everyone, including the PP and El Pi, knew they would be. The legislation should be finally approved by the end of the month or early July.

The opposition parties set about Biel Barceló's bill. The PP said that the only ones who'll be happy will be the hoteliers. Álvaro Gijón observed that "for the first time in history, the hoteliers' federation and GOB (the environmentalist group) are in agreement". The legislation will, he argued, create more problems than it seeks to solve. It will be "ineffective, arbitrary and legally inconsistent".

Josep Meliá of El Pi said that the government wasn't regulating, it was "crushing" holiday rentals. The bill fails to respect municipal powers or the right of owners to offer rentals. Olga Ballester for Ciudadanos described the bill as an "absurdity" which imposes very difficult requirements for registration.

The right (and the centre-right) were thus at loggerheads with the left who were introducing the legislation. They themselves, the government parties and Podemos, haven't been in complete agreement, but the bill will go forward and, unless Podemos decide to pull the plug, it will be approved. There is more to the legislation than just the operation of holiday rentals. These other aspects will come into force immediately, the actual operation of holiday rentals' regulation will be delayed until early next year. That's because the island councils and the town halls have to decide on the zoning, which is perhaps the most important aspect of the law.

Biel Barceló assured parliament that the government does not anticipate an appeal against the legislation as there has been in the Canary Islands. Legal advice it has received suggests there will be no appeal, though he did add "in practice, we will see". The appeal in the Canaries was specifically to do with zoning, but the principle adopted in those islands wasn't the same as in the Balearics. The Canarian government had essentially wanted to zone rentals some distance away from resorts. The courts said they couldn't, so the legislation is being rethought.

In practice, the same may happen in the Balearics. It will all depend on how the zoning will ultimately be determined, but the legislation doesn't specify that zones have to be away from resorts.

There was some clarity from Barceló regarding existing licences, i.e. for standalone houses and villas. There has been a fear that zoning might mean properties being de-registered. Barceló said that licences obtained before the change in law will remain in force, though these will be subject to any new specifications in terms of standards. But if you own a house or villa that is currently legally registered for holiday rental, you should be able to breathe easily.

The legislation is of course really about apartments. Any rental property marketed via websites, which can be the likes of Airbnb or those of local estate agents, must have a registration number. At present, none do. Fines are up to 40,000 euros and they can be applied to owners and to those operating websites. The legislation will make it possible to register apartments and to market them openly and legally, but the process of registration cannot begin until the zoning has been concluded. Once it has, there will be all manner of requirements. There will, for instance, have to be individual water meters and the permission of communities of residents. Applications for registration will then have to wait for inspectors to turn up, and that can take months.

Then there is the tenancy act, the Ley de Arrendamientos Urbanos and its loophole. The legislation will tighten this to the point of trying to squeeze the life out of rentals. Although state law sets no minimum on the period of a let, the Balearic legislation will treat any rental of less than a month as being for tourist purposes. What this will mean is that an apartment which is rented out for less than four weeks must have a registration number. The property cannot be advertised on Airbnb or other websites without one. As the government views these rentals to be tourist, the burden of proof will be on the owner to show that it is not for tourist purposes. On top of this, there will be the deposits to be paid.

In a nutshell, if you are currently renting an apartment to tourists, then you need to be very wary. The tenancy act defence will be very much harder to adopt than at present, though one shouldn't rule out there being a legal challenge to this aspect of the legislation (and possibly to others). It may be that in the future, once the zoning process is over, that the apartment could meet requirements for legal registration. That, though, is for the future, as also will be what might happen if there is a change of government in 2019. The PP has said that it will repeal the legislation. Given, however, that it was previously opposed to liberalising the market for apartments, any repeal and different legislation wouldn't necessarily mean a more advantageous scenario.

Real Family And Friends Shouldn't Be Forgotten

The government's housing act is to be used to assist with its tourism regulation. The announcement from the land ministry that the housing bill will include provision for a deposit for rentals of less than a month equivalent to the value of two months' rent can only be interpreted as an attempt to attack the blatantly touristic rentals offered under the tenancy act.

This has to be seen in the context of the government's wish that Madrid reforms the tenancy act so that there is a minimum of one month rental. Madrid may not do this, and the government knows that. It is therefore looking at different approaches to affect legislation - the tenancy act - which isn't its to directly amend: it is a national law and not a regional one.

The two months' requirement, which would seem to also be being contemplated for any type of rental under the tenancy act (bizarrely, given the government's desire to increase access to housing), has been booted upstairs to the Consultative Council, the legal body which is used to check on the regional government's legislation. It normally doesn't get involved, but it is significant that the government should have noted that it is being consulted.

As far as I am aware - and please, if anyone knows otherwise, let me know - more than one month's deposit cannot be demanded according to the tenancy act. If this is indeed the case, then it would seem as if the government is seeking legal opinion as to whether it can proceed.

If it does go ahead with this (assuming there is no legal challenge, which there may well be), part of me thinks that it's not such a bad idea. There again, how enforceable would this deposit be and so how many such deposits would actually be paid? Moreover, and while I'm in full agreement with the government seeking to close the tenancy act loophole, I am concerned about the scope of what it intends to be the legislation (or would like to be the legislation). The deposit idea highlights this and in particular the genuine use of holiday accommodation by "family and friends".

When they were in government and being extremely obstinate in not facilitating some liberalising of the holiday apartment market, the PP did at least make constant reference to the fact that family and friends would of course still be able to have access to accommodation. The family and friends - the genuine ones - seem to have been totally forgotten now.

There are owners whose use of apartments is confined to themselves and to a handful of weeks' occupancy by family (or close friends). Such owners should not have to become bogged down in bureaucracy or indeed be subject to forms of legal (and moral) restraint. They certainly shouldn't have to demand two months' deposit from family members. Nor should, for example, contributions to paying electricity bills be treated as income. It's arrant nonsense that any of this might apply.

The problem is of course knowing who is genuine and who isn't. The government, one has the impression, has given up bothering with any distinction and up to a point one can understand why. That doesn't make its stance any less unreasonable though.

Madrid In A Muddle Over Holiday Rentals

The secretary-of-state for tourism's visit to Mallorca during the week allowed the industry to get some things off its chest. None of them were particularly new. Politicians and senior officials were there as well. In the case of tourism minister Biel Barceló, he could afford to give Matilde Asián only a few minutes of his time; he had a television interview to get to. It was presumably time enough for her to tell him that Madrid isn't minded to pump more cash into the Playa de Palma reform because of what seemingly went missing several years ago. Even so, Asián, because of the national ministry's policy of modernising old resorts, appeared to also suggest that Playa de Palma will be looked upon favourably: at some point and in some way.

Asián's visit served only to spread confusion. Her boss, Álvaro Nadal, has made much of the resort modernisation. There may be legitimate issues about previous funding, but what is to be done about Playa de Palma? It isn't just one of Mallorca's main resorts, it is one of Spain's. Perhaps in future Madrid needs to take full control of any project. That way it will know that the money's being used wisely.

But Madrid wouldn't do this. While it might provide investment, a project such as Playa de Palma is a regional affair. The Balearics, as with other regional communities, has tourism responsibilities. It is therefore for the regional government to sort things out, as is the case with holiday rentals.

The past week has given the impression of left and right hands being unaware of what both are doing, of some ignorance of legislation and of messages being mixed. With holiday rentals, a fundamental issue for the Balearic government is a reform of the Ley de Arrendamientos Urbanos, the tenancy act. The government has forwarded to Madrid, as has the Mallorca Hoteliers Federation, its wish for there to be a minimum rental of four weeks. With this, it hopes to overcome the loophole that the act currently offers.

Asián seemed to suggest that she hadn't been asked about reform, said that there was no plan to reform the act (which is what Nadal has also said), but then added that she would look into it so long as someone tells her to look into it and on the grounds that everything can be made better. So what is Madrid's position? The national government, i.e. Asián, has also intimated that it is considering nationwide legislation for holiday rentals. This would represent a U-turn, as Madrid devolved responsibilities to the regions. It was perfectly entitled to, given what the statutes for regional government permit, but it appeared at the time to have washed its hands of the rentals' matter. The ensuing mess is at least partly Madrid's fault.

Despite what it might say about treating rentals of under four weeks as touristic, the Balearic government will encounter problems with effectively enforcing its rentals' legislation unless the tenancy act is reformed. And this obstacle exists in all other regions where there are issues with rentals and where the hoteliers and legislators have been banging their heads against a wall in despair of Madrid taking any real notice.

To cap it all, there is the European Union to take into account. It has working parties considering holiday rentals, including therefore the role of websites such as Airbnb. And what might Brussels come up with? Who can say. Madrid can't, or appears to be unable to. Things will probably have to wait until the EU speaks, which will probably provoke ever more confusion.

While Asián was here, she also had something to say about the tourist tax. She is opposed to it, as of course is her party. That was hardly a surprise, but there was a surprise when she said that she found it surprising that residents in the Balearics have to pay the tax if they stay in tourist accommodation. She was surprised? Was she unaware that the reason for this is because Brussels had decreed it?

The Alegality Of Fraud: Rentals

Alegality. It's not a word that's particularly common in English, but it does exist and is generally used, as would be expected, in discussions of legal matters. It also crops in respect of international business and globalisation, and is sometimes spelled a-legality. Its meaning, and I quote from the Urban Dictionary's definition, is "an unambiguously wrong, disruptive and often deliberately committed act for which there is not yet a specific law making that act expressly illegal."

The Spanish word "alegalidad" is much more commonly used. It most certainly isn't confined to arcane analyses of law. It is applied to more mundane, everyday issues, and there is a great deal of it. Alegality tumbles out of many a newspaper column inch. One has to conclude, correctly, that there is an abundance of issues for which law has not determined if acts are expressly legal or illegal, regardless of any ambiguous or deliberate wrongdoing. The mere fact that alegality crops up as often as it does leads one to also conclude that the law is often inadequate, ill-defined or not applied.

There often isn't application. Legislation, be it national, regional, municipal, can sit on the books having been approved and passed by the relevant legislatures without coming into force. This legislative inactivity is most common at the municipal level. Many are the one-time approved ordinances that one hears of which only some time later (several years in some instance) are officially adopted. In the intervening period, and despite there perhaps being previous ordinance, the potential for alegality increases, because no one is quite sure of the legal security.

The definition above is thus not always applicable locally. It isn't necessarily the case that acts are "unambiguously wrong". Yes there may be some taking advantage of a situation, but it is the essential ambiguity of legality that allows alegality to flourish, with responsibilities and powers of competing legislative bodies, to say nothing of the hierarchy of the courts' system, adding more fertiliser.

An example of mundane Mallorcan alegality was the car parking near Es Trenc. Much of what has now emerged after the ludicrously protracted process to arrive at a law for the nature park had to do with car parking. The upshot of the legislation is that plots which were once used for parking will not be, and they had been closed down because of their alegality. They weren't illegal but nor were they legal. The alegality had existed for years.

I was reminded of this legal ambiguity when rummaging through an archive of old newspaper articles. It was one from August last year. It had been kept because of its headline. It was a quote which said that "our tourism is based on alegality, illegality and fraud in law". The person who made the quote was Dr Juan Franch Fluxá from the law department at the University of the Balearic Islands.

His specific references were as follows: the alegality is exemplified by the likes of party boats; illegality can be found in the renting of apartments to tourists; fraud exists with those who use the tenancy act to rent to tourists and do so via Airbnb. "An unacceptable absurdity," he concluded.

What was interesting about Dr Franch's quote was that he didn't refer to rentals in terms of alegality. Yet alegal is how they have often been described. As an example, the CCOO union spoke at the end of 2015 of holiday properties being rented in an alegal fashion amounting to 25% of the regulated (legal) offer. The use of alegal has therefore created its own ambiguity regarding holiday rentals. But another member of the university's law department, Avel-lí Blasco, has also been unequivocal. Tourist rental in apartment buildings is not "alegal", it is "illegal".

The point is that one wonders how rentals of this type ever acquired a description of alegal. They have been proscribed in Balearic law for years, and if they hadn't been, then why was the law being used to fine owners? Perhaps it has been the case that certain interests have wished to promulgate the notion of alegality.

The use of the tenancy act is a different matter. Dr Franch's strident assertion of a fraud in law is something with which one take issue. If owners abide strictly by the terms of the tenancy act - no publicising as tourist/holiday accommodation and no services - then how can there be fraud? But what he was getting at was owners who abuse the law and seek to conceal the real intent, whether the property is being offered on Airbnb or any other website.

Rather than fraud in law necessarily, the tenancy act has created the scope for alegality insofar as it is a loophole. The national government should, indeed must, amend the act. If it doesn't, then legislation, such as that envisaged in the Balearics, will always be open to abuse. And yes, fraud.

Bringing Harmony To Holiday Rentals' Regulations

The new secretary-of-state for tourism, Matilde Asián, has hit the ground running. In so doing, she has left her predecessors, notably the immediate one, trailing well in her wake. Of course it may only be an impression - and one that will come to nothing, as these things have a habit of doing - but at least she appears to be proactive. Or proactive in a reactive sense, seeking to undo a mess of inactivity and governmental buck-passing and head-in-sand-burying that she has inherited.

As noted a few days ago, Asián wants to get together with the regional governments and try and find a way of harmonising holiday rental legislation. This would be, again as noted, a volte-face by Madrid. It had directed the regions to take responsibility for the matter, arguing - with some justification - that each region's needs are different.

The needs do differ, but the principles do not, and when Madrid abrogated its legislative responsibility, it hadn't considered the impact of the so-called collaborative economy. One might argue that it lacked foresight in not having taken Airbnb and others into account, but for the past four years it has shown no sign of adopting a proactive stance in reacting to changed - and greatly changed - market circumstances. Until now.

There is to be a tourism sector conference at which the regions will be represented. Asián is hoping that harmonised regulation can be arrived at and be based on "equity (i.e. fairness), taxation and security". In respect of the latter, she has referred to the security which Spain offers tourists (a key factor of course in having contributed to so-called saturation, a further product of which is the holiday let). There has been some alarm expressed about the lack of control and information when it comes to people renting accommodation; hotels, on the other hand, know who they have staying with them.

Asián announced her initiative during the tourism forum in Maspalomas (Gran Canaria). One of those attending, Antonio Mayor, the president of the hoteliers in Benidorm and the Costa Blanca, said that "all administrations" had until now demonstrated passivity and/or permissiveness. There has to be proactivity, he stressed, in combating the black economy and the momentum towards a style of accommodation which threatens to "blow apart" the tourism economic model.

He would of course say this, as have others from the hotelier sector (and also their political supporters, principally the Partido Popular). But while the hoteliers may be devils in the eyes of some on the left-wing, the attitudes of the left, such as with the Balearic government, are being shaped by their anxieties regarding excessive tourist numbers and tax evasion. The passivity in the Balearics, amply demonstrated by the PP government under José Ramón Bauzá, is being discarded, even if Biel Barceló is scrambling around trying to cobble together coherent legislation.

The greatest single barrier to this legislation, as I also mentioned previously, is the Ley de Arrendamientos Urbanos (LAU), national law that doubles - where some are concerned - as a fraudster's charter. Barceló has admitted that this is an obstacle, which is why he wants Madrid to change the law and to exclude short-term rentals under the LAU. He also said that the government intends treating such rentals as being touristic, even if they are not advertised as such. Quite how it will proceed with this is difficult to understand, unless Madrid amends the law. The government can always send in the inspectors, but there are only so few of these.

Barceló and also Asián face other obstacles. One is that the LAU is not a matter for Asián's energy, tourism and digital agenda ministry; housing matters come under the development ministry. The Spanish competition commission may well be another - its attitudes are generally permissive - while EU criteria would also need to be taken into account. Then there is the principle of "family and friends". While this is itself open to abuse, there are owners who genuinely do let family members use apartments without any payment. How might this square with Barceló's desire to eliminate LAU short-term rentals?

Having a national law on holiday rentals would make obvious sense, but although Barceló (and other regional tourism ministers) might welcome some intervention by Madrid, they would jealously guard their powers for tourism affairs, even if they don't really know what to do on the vexed issue of holiday rentals. With Barceló, he does seem to have some idea, but then what does one make of this business of him saying that holidaymakers would have to abide by communities' rules? Who would enforce such rules and how? Communities already tend to have such rules anyway. And fat lot of use it does them, if people choose not to observe them. Just like others choose to bend rules or abuse loopholes, such as with laws on rentals.

Holiday Rentals: Now they go international

The Spanish Confederation of Hotels and Tourist Accommodation (CEHAT) has issued a report in which it says that holiday rentals that are not within the law generate a black economy sum of almost 3,000 million euros.

This is a staggering amount of money, so staggering that it is hard to know what it actually refers to. Is CEHAT saying this is an annual sum? As always with these amounts that are thrown into the media fire, they are designed to stagger without substance being offered to support them or to explain them. Let's just accept, though, that there is a lot of black money associated with holiday rentals; it is undeniable.

This 3,000 million is from the "oferta alegal". The use of "alegal" is not unimportant as it doesn't mean the same as "ilegal". It means "not within the law" and can also mean "unregulated". The distinction is important because across Spain many holiday rentals are "alegal" in that there is no legislation in several regions of the country that expressly deals with this type of accommodation. There is one region, however, that does have legislation, and we are of course familiar with it: the Balearics tourism law.

The need for regions to have their own laws is one consequence of the reform of the national tenancy act. Madrid, by this reform, effectively abrogated any responsibility for holiday rentals, placing this responsibility with regional governments. It was a reform that had the support of the hoteliers (some might say that it was a reform drawn up by the hoteliers) as, in certain parts of Spain, the hotel lobby is all powerful, e.g. in the Balearics, and heavily influences regional legislation.

It was a reform, however, that was curious in one particular way. The national plan for tourism, published in June last year, identified "an increase in residential tourism" as a strength of Spain's tourism. Though the plan's document avoided reference to holiday rentals, concentrating instead on second homes and on family use of such homes (permissible under the tenancy act), this type of tourism is only an element of the catch-all term "residential tourism". Another element, and a very significant element, is the "oferta alegal" or "ilegal" where illegal can be used.

What was doubly curious was that, having identified this type of tourism as a "national" strength, a reform that does not directly come under the heading of tourism, that to do with the tenancy act, which is property legislation, went in the opposite direction. By handing responsibilities to regional government, not only was a national strength ignored but the potential for diverse and so confusing legislation was also heightened. To give one example, and a very different one to the Balearics, in Catalonia, where there is regulation, the offer of holiday rental places has soared. CEHAT says that, in Barcelona alone, it greatly outstrips the number of places in hotels or previously regulated types of accommodation, so bringing about conditions under which it is impossible for hoteliers to compete.  

But what CEHAT doesn't say is that Catalonia introduced a tourist tax last year. The government there saw a need to harmonise this tax for different types of accommodation and also saw a revenue opportunity; it has regulated holiday rentals in order to bring in more money. And what CEHAT doesn't admit is that growing tourist demand cannot be met by hotel supply and will not be met by a new boom in hotel construction (there are due, for example, to be some new hotels built in Mallorca but only a few). 

There has been, again according to CEHAT, a very significant rise in the "oferta alegal" over the past three years: a rise of 300%. We will have to take its word for it. There is little doubt that there has been a steep increase and there are good reasons why - demand, economic circumstances (of owners who need to supplement incomes), the emergence of P2P websites such as Airbnb. Alarmed by this, CEHAT sees the threat not just nationally but also internationally. At the meeting of the European Trade Association of Hotels, Restaurants and Cafés in Europe that takes place shortly in Athens, it hopes that "international best practice" can be established to guide regulation of accommodation that is outside the law.

CEHAT, as with the hotel federation in Mallorca, cries foul against the "oferta alegal", warning of the dangers it poses to the tourism industry and claiming unfair competition. It will keep on issuing these warnings and making these claims, while all the time not admitting that its aim is to eliminate competition; and competition, moreover, that is needed in order to satisfy demand.

The Non-Governing Tourism Ministry

Germà Ventayol is a columnist with "Ultima Hora". His column is entitled "Es Mussol". The owl. But mussol can also mean sty. Not a sty as in pigs but sty as in an  infection on the eyelid. Through the eyes of many, and not only the owl, there is an inflammation in Mallorca's tourism industry, for which treatment seems simple but which is anything but.

On Monday, Ventayol said this: "To prohibit the commercialisation of tourist rentals is a political suicide which I cannot believe that any (political) party with a minimum of common sense would commit".

Hallelujah. Perhaps I have criticised the local Spanish press too much. Ventayol is the latest local journalist to wade in against the regional government: "the armed wing of the hoteliers", as another one has described it.

The context of Ventayol's "political suicide" is rather different to the one in which the arguments regarding the tourist renting of private accommodation are typically placed. Renting of accommodation provides "the bread" from which many families in the Balearics live. It gives money which can help finance studies for their children or the care homes for their elders.

Ventayol is making a similar point to that which Toni Reus, the mayor of Santa Margalida, has made. Reus has defended the right of an owner to supplement income through property rental and has so taken issue with the government's attitude when it comes to apartments.

The government's response to both Ventayol and Reus would be that owners do have this right, as it exists under the tenancy act. It is an argument with which we are now very familiar but it is one that is of no use to anyone who wants to optimise a return on a property by advertising it as a tourist rental and, moreover, advertising it as such through channels that will enable optimisation. It is a specious argument and one that only succeeds in adding to confusion.

The story of the tourist rental of private accommodation has long been a matter of confusion. It shouldn't be, but it has been, and the government has encouraged this confusion. It has now added to this confusion by alluding to the potential for island councils to take matters into their own hands by regulating accommodation. The government will say that it is being fair by giving the councils the chance to regulate while at the same time being as selective as it always is in citing the tenancy act. It knows full well that the Council of Mallorca doesn't want to assume any responsibility for tourism matters, so therefore this council will not regulate.

Were another council (Menorca's being the only likely one) to regulate and so permit the tourist rental of apartments, the confusion would be aggravated. It would be an absurdity were one island to have different rules to another. It would be an absurdity brought about by an abrogation of responsibility by the tourism ministry to regulate for the whole of the Balearics, but this is an abrogation which is a consequence of the ministry being too scared to adopt a common sense approach. It may be political suicide to deny commercialisation but it would be political suicide to agree to it; the hoteliers would never forgive the Partido Popular.

Carlos Delgado hastily called a meeting in August, a month when important issues are never normally considered. It was a meeting without representatives from business sectors, without even the president of the Council of Menorca. Yet, Delgado claims there is consensus: one to do nothing other than to hold out an olive branch to the island councils, one of which - Ibiza's - agrees with him and another of which - Mallorca's - doesn't want any responsibility.

The government's disingenuousness and dissembling are staggering. It boasts that some 4,500 houses have been registered in the Balearics since the passing of the 2012 tourism act. Houses, yes, but why not apartments?

The reason why has its roots in the hotel boom of the 1990s which concentrated on building self-catering apartment hotels and which led to the 1999 tourism act, the one which first prohibited commercialisation of private apartments for tourist rental. Hotelier power and hotelier objections helped formulate tourism legislation then (they hadn't bargained on there having been a similar boom in private apartments for rent) and still do. The government can't admit this, because to do so would be to admit that it doesn't run the tourism industry.

Delgado's conveniently called meeting and cynically contrived consensus have merely inflamed further a situation over which it has so little control that it seeks to let the island councils decide for it. It is no way to run a tourism industry. Not that the government does.


Any comments to andrew@thealcudiaguide.com please.

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.

Now Customer Satisfaction Gets Illegal

I despair. Some of you may also despair. After you've read the following. Are you sitting uncomfortably? Then he shall begin, he being Ramón Estalella, the secretary-general of the Spanish Confederation of Hotels and Tourist Accommodation.

"We are not against people being free to rent out their properties. The thing we ask, though, is that, as with the tourist offer, these owners comply with the rules of the game as they apply to legislation and taxation, etc. in order that the greatest transparency and guarantees are given." This rental of property should be "a legal, transparent and controlled economic activity that contributes to the public purse".

"One of the problems created by this unregulated provision is customer dissatisfaction. As the rental arrangement is between private individuals, if any problem arises, no form of protest can be made. The image of Spanish tourist accommodation, number one in Europe in terms of its quality-to-price ratio, can therefore be seen to be damaged. This lack of transparency creates problems for everyone."

Sr. Estalella has gone on to say that the majority of owners who rent out private accommodation form part of the black economy because they do not declare income and commit social security fraud. He has added that the lower prices of these owners' properties represent enormous competition to the legal offer; not because of customer satisfaction but because of price.

So, here we are yet again. The slight difference this time round is that it is a Spanish hoteliers representative who is getting the retaliation in early against the so-called illegal offer and not a Mallorcan hoteliers representative. Never fear, the Mallorcan hoteliers won't have their lost their voice and won't be short of the spade-loads of hyperbole that were being chucked around last summer. The economy was "broken", they said, because hotel occupancy in high summer was going to be so dismal, and this was all down to those nasty inhabitants of the black economy. It turned out to be rubbish; July's occupancy had never been so good (this century at any rate).

I suppose one can argue that Sr. Estalella has moved the now-so-predictable arguments on a touch by bringing in the customer satisfaction thing. He would appear to know that there is a great deal of dissatisfaction, despite the fact, as he points out, that it is difficult for dissatisfied guests to make their complaints known. Perhaps he stops tourists on the streets of resorts and interrogates them.

In his defence, it is of course far easier for a hotel guest to complain and to go onto Trip Advisor and slag off a hotel. If all illegal accommodation is lousy, then it would definitely do harm. But what percentage of it are we talking about? Would the complaints outweigh complaints about hotels? Can it be said, in all instances, that hotel guest complaints are acted upon satisfactorily and that guests' experiences of hotels don't also do harm?

The latest round of let's-all-have-a-go-at-the-illegal-offer game is being played out against a background of reform to the tenancy act. This reform, so the unthinkingly pro-hotelier media in Mallorca has been telling us, will be the thing to make the rotten non-tax-paying owners finally get their just desserts. Perhaps it will also mean that tax-paying owners who have, remarkably enough, been declaring and paying tax, despite having allegedly illegal accommodation, will get what's coming to them as well.

I despair of all this not just because of the same old, damn points being made by the hoteliers but also because of the total confusion that surrounds the issue of the so-called illegal accommodation. And now, because of reform to the tenancy act, the Balearics may well have to pass another bloody law. I thought they'd already done this, but Will Besga, lawyer of this Mallorcan parish, who is far better positioned to know about law than I am, suggests that this will indeed be needed. And once it's passed, if it's passed, everything will be clear. Or probably not. 

Though it has been generally assumed that the illegal offer is more of an issue in the Balearics (and the Canaries) than in other parts of Spain, the fact that a Spanish hotelier group is pronouncing on the subject shows that it isn't. And a reason for it having become more of a whole-Spain issue is that anything that smacks of not being legal is fair game in these times of crisis and austerity. Fair enough. Now then, how many hotels do you reckon pay at least some of their employees' wages in black?


Any comments to andrew@thealcudiaguide.com please.