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

By AdmSolJM16

Palma City Council has set next spring as the deadline to have the zoning provided for in the tourism law that will determine which areas of the city can be leased multifamily housing and which are not.

In this sense, the City Council already has several reports prepared to approve the moratorium on tourist establishments affecting:  Palma centre, first Eixample, Santa Catalina and Playa de Palma. Decisions must be accompanied by technical and legal reports to support them.

In addition, meetings will be held with the corresponding entities in order to know the Plan of Intervention in Tourism Areas (PIAT) that is drafted by the supramunicipal institution.
This document, among other things, sets the ceiling of places, both hotel and rental, that can be authorized in each area. In the case of Palma this plan proposes the reduction of the places. It is therefore very important to have up-to-date data on the number of single-family and multi-family dwellings since, although the former may be the subject of holiday leases, they also count in the global number of tourist places allowed.

palma-old-town

In another order, and regarding the current season, the Directorate General of Tourism is processing the 1,500 tourist places, corresponding to 264 homes that were engaged in commercial holiday rental. Of the total number of tourist houses, 153 had registered the declaration responsible for starting tourist activity between 2016 and 2017, but they are floors in multi-family buildings and semi-detached houses, which were not authorized to be marketed at the time of registration.

These homes were registered prior to the entry into force of the law that regulates the tourist rental and that establishes a moratorium of new authorizations of commercialization of tourist stays in houses until the island consoles and the Palma City Council establish the zoning. The Ministry of Tourism has begun the process of the definitive removal of 111 tourist houses authorized prior to 1999, in which the Inspection Service has found that there is no longer any tourist activity.

0
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
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