The Homeowners Associations’ power over touristic rentals

By AdmSolJM16

Tourism is obviously a great growth opportunity, but the boom in property rental for touristic purposes has turned into one of the main concerns of homeowners associations and local governments.

The lack of control over short term rentals of touristic dwellings allowed the increase of long term rental prices and it forced many local residents out of their homes.

The increasing need to regulate this situation led the Spanish government to take action. However, tourism matters are responsibility of each Autonomous Community and urban planning of each Municipality, so the only way the government can regulate touristic housing is by reviewing the law. In this case, clarifying the definition of ‘seasonal rental’ in the Urban Rentals Law and giving more power to homeowners associations through the Horizontal Property Law.

Although law reforms are full responsibility of Spanish government entities, it has been announced that changes will only be made with the consensus of all parties involved: Autonomous Communities, municipalities, homeowners associations, relevant online platforms, hotel owners and unions.

For this purpose, the Ministry of Tourism has recently addressed the 17 Spanish Autonomous Communities and the Spanish Federation of Municipalities and Provinces with a proposal to review the Horizontal Property Law, that currently states that it is necessary to have consensus among all owners to make important decisions or change the homeowners association bylaws.

If the change in the law is accepted and implemented – and it seems that there is a general agreement among the autonomous governments – homeowners associations will have more decision power as it would bring the number down to a majority of three fifths of the owners (that represent three fifths of the total property area owned, which is the actual criterium used by this law) needed to, for example, forbid the touristic rental of dwellings in their building/ community. At the moment, as long as the existing community bylaws are respected, the homeowners associations cannot prevent each owner to rent their property, because their own vote will hold back the consensus. The Spanish government has also proposed to change the Urban Rentals Law, limiting seasonal rentals to periods of minimum 7 consecutive days, not exceeding a total of 45 days per year. However, there is still no consensus among all those involved on this issue.

Also to help the autonomous communities control touristic rentals, and to offer legal security to both property owners and the people renting, it was suggested the creation of a national registry of all housing for touristic use. This registry would make it compulsory to identify the people renting and also make sure homeowners comply with their tax obligations.

If you need more information about the Tourism Law and holiday rental, do not hesitate to contact us. We advise, defend and represent our clients at all levels. Our greatest asset is an infrastructure of professional leaders in each field of action, especially Real Estate and Tax, as well as our international vocation and multilingual capacity.

0
Holiday rental law decree

By AdmSolJM16

The Government is finalizing a law decree requiring internet portals to report owners and income. These must comply with the Public Safety Act and report on who is staying at their properties.

The Internet portals should inform the Tax Agency of who owns the tourist homes that appear on their websites and what the income they receive. In the same way, the state security forces must be informed of who the people are staying in them.

These measures are intended to increase control over tourist rental, improve security and crack down on tax fraud.

The association of the tourist rental Aptur-Baleares and the electronic portal Airbnb announced yesterday that they will work together to promote Balearic Islands as a sustainable tourist destination.

It is well known that the boom of tourist rental of apartments has recently experienced an unprecedented development in the Balearic Islands. The tourist towns of the Balearic housed inside thousands of properties intended for that purpose. Palma leads the statistics in terms of number, 3,715 in total, followed by Pollença and Alcúdia.

mallorca-tourism-tax

This data may change with what is known as zoning established by the tourism law. May not be marketed tourist stays in areas declared eligible (with administrative certificate). The zones will be determined in a motivated way by the Insular Councils, following a mandatory report from the Town Councils, except Palma City Council that will decide without need of the Insular Council of Mallorca.
While not zonifique the license application is paralyzed through DRIAT. The maximum term of 1 year is established, that is to say, until August 1, 2018 to proceed to zoning; if after this period the zoning has not been established, declarations will be requested to initiate activities regarding detached single family dwellings, single family dwellings between medians and single family dwellings.

During the past year, the holiday rental managed by the big platforms left in the Balearic Islands 900 million euros. The latter consider tourist rental on the islands not only generate benefits for traders and owners of flats and apartments but has also diversified supply generating activity in areas not noticed so far the effects of the tourism industry.

2
A review of the Balearics Tourism Law

By AdmSolJM16

At the beginning of the month the moratorium for the granting of new tourist rental licenses came into force after the text of the amendment to the Balearics Tourism Law was published in the BOIB, after having been approved by the full Parliament on the 18th of July.

The amendment makes special reference to two questions:

-regulation of the commercialization of tourist stays in housing.
– the establishment of a real roof of tourist places.

The Government of the Balearic Islands has sent a letter to all public administrations that have a registration to inform the public that no new declarations can be submitted responsible for starting the tourist activity (DRIAT) until the insulars “consells” and the City Council of Palma establish the areas suitable for this economic activity.

The new tourism law that has entered into force declares those responsible for infringements related to the sale of tourist stays in illegal housing to property owners as well as to potential exploiters and marketers. The law introduces a modality called “main housing rent”, when the commercialization is carried out by the same owner in its main dwelling for a maximum period of 60 days in a period of one year.

tourism-mallorca

General requirements for residential tourism marketing

  1. Can be marketed short-term tourist stays in residential homes always carry out this marketing proprietary or made by operators or any of tourism marketing channels, on the terms set down by law.
  2. You can only carry out the activity of commercialization of tourist stays in dwellings if it is done in residential dwellings that have the habitability certificate in force or the corresponding title.
  3. Only new tourist commercialization of residential housing can be carried out that are located in areas declared expressly suitable.
  4. It’s not possible to commercialize tourist stays in any house with respect to which a firm sanction is imposed for serious or very serious infraction of the urban legality, as long as this legality is not restored.
  5. The residential houses that are the object of tourist commercialization have to prove the sustainability by obtaining the energy certificate that is determined by regulation.
  6. The houses that are subject to tourist commercialization that present a responsible declaration must have the systems of control of the consumption of water that are determined by regulation. In addition, they must be provided with individual meters with respect to other energy supplies linked to the dwelling, such as electricity or gas.
  7. You can’t touristically subject to market any residential dwelling or has been subjected to official protection regime or appraised price.
  8. The marketing person must meet all regulatory requirements requiring activity include: requirements that may be demanded for exercising business activity;the labor law, if you have hired staff;and tax-related requirements contained in the specific regulations.
  9. The marketing of tourist stays person must submit to the Directorate General of Police information concerning the stay of the people staying in them, in accordance with the rules of public safety.
  10. Users hosted people have to meet the applications of coexistence and public order and in cases of horizontal property, the internal rules of the homeowners where the property is located.
  11. The stays that are commercialized tourist must consist in the temporary assignment of the right of enjoyment of the totality of the house by short periods, understood like stays by days or weeks, without a stay can be more than one month.
  12. The tourist stays regulated in this chapter are incompatible with the formalization of contracts by rooms or with the coincidence in the same house of users who have entered into contracts.
  13. The companies that sell tourist accommodation in residential dwellings must sign an insurance policy that covers civil liability and, in the case of houses subject to the horizontal property regime, to cover any damages that may be caused by users to the owners community.
  14. The residential dwellings in respect of which the responsible declaration is presented in order to start the activity of commercialization of tourist stays must have proven the minimum seniority that is determined by regulation.

Do not hesitate to contact us to have more information related to the tourist rental in Mallorca.

 

2
New Law of Tourism, what you should know

By AdmSolJM16

Last week came into force the new Law of Tourism of the Balearic Islands that begins including a moratorium of one year in which will not be granted new licenses of tourist rental.

Aspects to consider:

  • The institutions with urban planning have a period of one year to establish and approve the zoning. Until this is not carried out, no further statements may be submitted starting responsible for tourism and new licenses will be given.
  • The different marketing channels are obliged to publish the license number of the dwelling corresponding to the final license granted by the administration that has the tourism management competences.
  • The new Tourism Law introduces a modality called “main housing rent”. This will be given when the commercialization is carried out by the same owner in its main dwelling for a maximum term of 60 days in a period of one year.
  • In the modality of houses subject to the horizontal property regime, it’s necessary an agreement of the junta of owners by majority of the proprietors, who at the same time constitute the majority of quotas of property, to carry out the tourist commercialization.
  • Touristically market is prohibited any type of residential housing subject or has been subject to official protection regime.
  • The person marketer of tourist stays has to send to the Police DG the information regarding the stay of the people who are staying, in accordance with the rules of public safety.
  • Inland tourism accommodation must have a minimum of five accommodation units.
  • The law maintains the repeal of section 5 of article 88 of Law 8/2012, which allowed an exchange of two stays for one.

tourism-law-mallorca1-2

As far as sanctions are concerned:

  • The new law declares those responsible for infringements related to the commercialization of tourist stays in illegal housing, both the owners of the properties and the potential exploiters and marketers.
  • Marketing a home without submitting responsible statement implies a serious offense with fines between 20,001 and 40,000 euros for both the owner and the operator or marketer, and each house is offered.
  • In the case of platforms or other owners and operators of the tourist marketing channels, advertising or promotion of illegal offers implies penalties of up to 400,000 €.
1
Balearic Islands, the spanish economic engine

By AdmSolJM16

Balearic Islands are one of the great economic engines of Spain thanks to the good behavior of the tourism sector. So much so they lead in 2017 and will lead in 2018 the growth of the Gross Domestic Product.

Never before, the Balearics had grown as much as now. According to recent banking data, the economy of the islands is advancing at a year-on-year rate of 4.4%, a growth so strong that there is no precedent in this century.

In this sense, the complex situation that is going through the Balearic real estate market is fundamentally due to several factors:

– The investment funds, which are buying buildings in different areas of Palma, mostly in the Old Town and, as is the current regulations, are dedicated to making hotels of tourism inland.

– On the other hand, there are the SOCIMI companies that are dedicated to buying real estate assets to subsequently offer a rents to their clients. They buy flats or lots of flats through the bad bank and then rent them.

balearics-properties

Foreign investment will continue to reinforce price increases in some high-value areas and will lead to “real estate oases” that will persist over time. Thus, the new fragmentation of the real estate market must be made aware, and there are significant differences within the big cities. However, the distortions generated by the dynamism of some areas, will end up causing many savers to re-consider real estate investment as an option.

The profitability of deposits is close to 0% when the Bank of Spain estimates the gross profitability of housing per rent at 4.29% and puts it at 9.54%, once its revaluation is accounted for. Potentially attractive figures, although conditioned by two important issues: the costly maintenance of a home and its lack of liquidity in stress moments.

Real estate investment is in the center of attention but, unlike the “boom” of the past, we will have to be very selective since the population trend will not accompany in the long term and the additional push of foreign investment will only be felt in specific areas.

Our team is committed to providing the best work processes to provide our customers with the best results, in a constant quest for professional excellence. We establish external collaboration when circumstances require and are firmly committed to transparency and honesty in our actions.

0
New data on the tourism law, Mallorca

By AdmSolJM16

The Governing Council of the Balearic Islands has recently given its approval to the draft law that will regulate holiday rentals on the islands after incorporating 200 of the 294 allegations it has received in the public information period to which it was submitted.

The document explains the novelty of not allowing tourist rental in housing of less than five years (initially was a period of 10), and during that period, the use of housing must have been private residential and will be accredited by the declaration of new construction. In the same way, it defends the fact that it is the communities of neighbors that decide whether in their building can be rented or not the houses to the tourists; and that all that channel that puts in contact offer and demand, will be considered channel of tourist commercialization.

At the moment, the project must be submitted to the parliamentary process that will introduce amendments and modifications so that it can enter into force, although it will not be before September of this year. The regulation of the commercialization of tourist stays in houses, the so-called tourist rental, will answer to a “reality” that exists in the Balearics and will allow to have a tool in enforcing the law.

A specific register will be created in which all the homes that are being commercialized must be registered, implying that all the illegal offer can’t be commercialized by tourist offers channels. In this way, any commercialization channel will have to put the number of the legal registration of activity of the house, including the platforms that announce in its web pages apartments for the holiday rental.

balearics-tourism-law

To this, must be added that rent will not be allowed in apartments of less than five years old. The Consell de Mallorca will create a second bag housing specific places for holiday rental, different from the hotel rooms, to exchange new law dictates touristically for those wishing to market a house or a flat. It will also set some “objective criteria” for zoning, which should be observed by all municipalities, including Palma.

In view of these criteria, the Balearic Islands Association of Apartments and Holiday Rental Homes (Aptur-Baleares), states that despite sharing many of the objectives of this Government, the regulation made leaves out 80% of the current bid. In addition, they point out that difficult technical and accessibility requirements are imposed and a single bag of places is established, without specifying which ones will be allocated to holiday rentals and which ones to the hotel sector. The association is against the decision to establish that any contract less than 30 days is considered as a tourist, as well as being considered a marketing channel either a web, as an advertisement in a printed newspaper or as the showcase of a real estate agency.

0
Mallorca Tourism Law

By AdmSolJM16

Few weeks to the beginning of the tourist season and continuing with the follow-up we made to the situation of the Balearics Law of Tourism, has just confirmed that most of the homes for vacation rentals in Palma don’t meet the requirements set in that law.

This statement is based on data as evident as the fact that while the Ministry of Tourism registers 302 homes of this type, in the capital of Mallorca more than 6,000 tourist homes are rented through the internet.

Recall that the Tourism Law prohibits tourist rental in multi-family buildings.

This circumstance that is not fulfilled in the majority of dwellings, according to the abysmal difference in these registry data. The Balearic Government is studying the implementation of a new standard, which allows rental activity in multi-family housing, with the approval of the neighbors. A decision that has many detractors. From the association of tourist apartments Aptur they argue that this measure is not viable and that the houses in these circumstances are in a lawless situation, since the Law of Urban Leases contemplates to offer tourist services “in any type of house” by a “short period of time”.

palma-old-town

Another novelty that has recently been known is that the towns of Mallorca’s interior will not limit tourist rental and therefore are exempt from distinction between tourist and residential areas, a requirement included in the draft of the Holiday Rental Law.

With this measure, the Government of the Balearic Islands aims to benefit small towns that have empty houses and where the problem of access to a home is non-existent. Thus, the economic activity of these nuclei won’t be restricted. This measure will not give freedom to the tourist rent, since the law sets some requirements when renting, such as accessibility, energy consumption and not having previous penalties in urban planning.

townhouse-pollensa

From Ripoll Mateu Solicitors Mallorca we recommend hiring your holiday home in Mallorca through companies in the sector that are solvent and offer guarantees. Balearic Villas  in Pollença, with over 15 years of experience in the Mallorca holiday villas industry,  have the experts & the know-how to create the perfect, independent-living holiday for you.

 

0
Information on rental and sale of properties in Mallorca

By AdmSolJM16

The purchase of a house for rent offers in Spain an average return of 5.3%. Acquiring a property to rent it is each year a little more profitable. Compared to 5.4% in 2016, profitability in 2015 was 5.2%, in 2014 5% and 4.8% in 2013.Mallorca, offers a return of 5.4%, being one of the most profitable municipalities to buy a house and put it on rent.

One of the engines of the reactivation that is taking place in the real estate market is the appetite of the medium and big investors, who buy housing in ours in search of the high yields offered by the rent. This market is very strong in Spain and in a context of low interest rates and the absence of such high returns in financial markets, which explains why it is a safe bet.

The demand for flats under lease already exceeds the offer in Spain. All forecasts indicate that 2016 will close with price increases above 10% on average in this segment, compared to the previous year. Real estate specialists agree that a new bubble has begun to form in this market after seven years of stagnation and falling prices.

The rent today is already present in more than 20% of the country’s residential park, and its upward trend will not slow down during 2017. Mallorca is one of the areas leading the increase in prices.

The large cities of the Spanish geography show considerable increases in the price of rents, mainly for a common factor: given the strong demand, supply is still insufficient and this makes prices higher. There is a double speed in this market. In the big cities shoot up, although in medium-sized municipalities and in the smaller ones the prices slow down.

In terms of sales figures, second-hand housing in the Balearic Islands reached an average price in October of 2,183 euros per square meter, representing an increase of 0.52 per cent per month and 6.47 per cent year-on-year, the country’s most intense promotions, according to the monthly sales price report. For its part, the Balearic capital, Palma de Mallorca, ranked tenth in the national ranking of monthly increases, rebounding 0.55 percent. From one year to the next, it was the Spanish capital that increased its prices the most, showing a rise of 8.81 percent. Thus, with 2,145 euros per square meter in October 2016, Palma de Mallorca was the eighth most expensive provincial capital.

If you intend to purchase a property in Majorca from a foreign country like England or Germany, you should consider that both the jurisdiction and the processes to be carried out and the roles of professionals involved in it are different. Throughout the whole process, the presence of a lawyer is essential to be responsible for providing obligatory advice to clients on legal, tax and legal liabilities acquired during the action of sale.

Ripoll&Mateu can fully assist you in the buying process.

 

1
Increases the demand for unique properties in Mallorca

By IbizaSol

One of the curiosities of the real estate sector in the last years is being the increase of the demand of singular houses. Mallorca is one of the areas with the highest market for high-quality construction, presenting great prospects for the future.

This growth is being presented in Mallorca at a time of crisis in other sectors. Ibiza and Mallorca, show a very different behavior from the rest of Spain in this segment. What had traditionally been German and English demand, spent a few years on the Russian market and lately the Scandinavian market is entering with great force. Mallorca is a stable and safe area, with extraordinary connectivity with Europe through relatively short journeys.
In addition, it is a product that, although it can be developed in new soils, these last years is giving more and more in already built buildings undergoing integral reforms, and in extreme case to total demolitions to build a new house. Therefore, it is independent of the scarcity of land.

When an owner responsible as a house in Mallorca , is looking for a good team of professionals who accompany and advise in all aspects from the beginning to the end of the work. Professionals of architecture and construction who can shape and realize one idea, who can provide alternatives that improve the perspectives, analyze the technical, urban and economic feasibility of this idea.

Regardless of whether the new owner acquires a plot for building or an old property to reform, it is essential the figure of a lawyer who offers comprehensive service in everything required for the purchase of a property. It is therefore necessary to have the services of a firm of lawyers specialising in real estate law with multilingual abilities to offer totally reliable and understandable advice to the customer.

  • Advice and assistance will be given to obtain a Spanish ID no (called a NIE).
  • Negotiate, amend and finalise the terms and conditions of the purchase contract
  • Conduct a land registry search to ascertain the official owner, the description of the property; whether the building is registered and whether there are any charges attached to the property, such as a mortgage, easements or positive/negative covenants.
  • Search at the local council planning department to discover whether the building itself has a building license/permit.
  • Search at the cadastral registry to confirm the cadastral value.
  • Completion of the transaction before a Notary Public. A notary public is a Spanish Public Servant who certifies the capacity of the parties and the content of the title-deed.
  • After signing and the completion of the deal, Property Transfer Tax (ITP, currently a progressive tax from 8 to 10%) has to be paid to the Balearic Islands Tax Authorities within 30 days of completion, in accordance with a general tax rule.
  • Formally notify the utility companies (electricity, water, etc) of the change of ownership and organise payment arrangements with your Spanish bank.

We specialise in Real Estate Law and legal and tax advice in the process of buying and selling a property in Mallorca.

 

 

1
Why you should have a property survey before you buy a property

By IbizaSol

As we have said on numerous occasions, acquiring a property in Mallorca is a very different process from other foreign countries and requires information and professional advice that facilitates the purchase while minimizing the risks.

Among other procedures, we strongly recommend carrying out construction surveys previous to the closing of the purchase sales process. These, come in a variety of forms according to the type of property that you are buying.

Reasons to perform building surveys previous to the buy of a property

  • The building survey will help you to have knowledge about the the property structural conditions.
  • This process allows youto be aware ofany problemsbefore buying ahome and know the location of boundary lines and other lines of occupancy or possession.
  • The survey will certify that the buildings and other improvements, alterations, and repairs to your property that exist at the time of the survey are not in violation of laws.
  • The survey will report your zoning jurisdiction and classification.
  • This knowledge will help you to begin a process of negotiation.

Main types of survey

  • Condition Report: This is the most basic survey you can get, it is designed to complement the mortgage valuation and just provides light indications as to the state of various parts of the property.
  • Home Buyers Report: this is suitable if you are going to buy a property that is in a reasonably good condition but generates some doubts. It will tell you any obvious major problems, and includes a valuation and an insurance reinstatement value. It also breaches of building regulations set by local councils of different localities of the island.
  • Buildings Surveys: This options is valuable if you are looking at a very old, unusual, listed, timber framed, or thatched property. It is also good to have a full building survey done if you want to do some serious building works and includes advice on repairs. It provides estimated timings and costs, and will tell you what will happen if you do not do the repairs.

If you are in the process of purchase a property in Mallorca , it’s advisable to appoint an independent surveyor working exclusively for you as a buyer. The cost and type of the survey depends on the size, condition and age of the property.

We have an in-depth knowledge of the General Urban Plan and the Spatial Plan of Mallorca, and have the best professionals in the field for the island to assist in construction matters and legalisation of constructions in Mallorca.

In Ripoll & Mateu we work to get total satisfaction of our customers effectively by offering legal services and personalized assistance. Real Estate Law, conveyancing, urban planning and foreign investments in Mallorca are our specialties.

 

 

 

 

 

0