Legal issues to sell a rented property

By IbizaSol

As specialists, we talked a lot about the process of buying and selling properties in Mallorca, but it is possible that sometimes an owner wants to sell a rented property.

The first thing to consider in this situation is that it is a completely legal operation, although we must consider a number of limitations depending on the regulatory regime to which the lease was clamped, depending on the date of signature. This determines the obligation of the purchaser to respect the new lease, depending on the regime to which they are subject:

LAU de 1964 (signed before January 1, 1995). In this case, the lessee has the right to continue occupying the property until the death.

LAU 1994 (signed between January 1, 1995 and June 5, 2013) Case in which the lessee is entitled to be in the house until it comply with the 5 years of the contract.

LAU 1994, following the reform introduced by Law 4/2013 (since June 6, 2013). The lessee is entitled to continue in the house until it comply with the 3 years of the contract when the lease is registered in the Land Registry or for three months if the lease is not registered. Regarding this last point, should be noted that once a renter occupies a rented flat, if the contract is not recorded in the Land Registry, the owner is entitled to put the property on sale.

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If the rental agreement is registered in the Land Registry, it will remain in effect even if the owner decides to sell the property. This is based on the Reform of the Urban Leases Act 2013, which came into effect as the measure to promote flexibility and development of rental housing market. In this case the tenant must not leave the building until the contract expires not although can be transfer the ownership of it to the new buyer.

In the case that a rental contract was not registered in the Land Registry, must check whether it is specified in the renunciation of preferential purchase. If this clause was signed, the owner can sell the property to the tenant communicating the eviction with 30 days in advance. If there is the case that the owner does not communicate the sale to the renter, this last can exercise the right to repurchase, purchase the property at the same price that is being sold to third, having 30 days to do it. One last case, if the contract is less than 3 years and is not being communicated the intent to sell before the end of the agreed period, this is automatically renewed up to three years, which prevents the sale to the owner until this deadline is exceeded not.

As a specialist in Real Estate Law in Mallorca, we offer comprehensive advice in the process of buying and selling property. 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.  We’ll attend you with no obligation.

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News about the Law of Tourism, judgment of TSJIB

By AdmSolJM16

The High Court of Justice of the Balearic Islands (TSJIB) has declared null a part of the decree of general principles and guidelines for coordination in tourism which was approved by the Government of the Balearic Islands in 2015 as it believes that invades own competencies of the Insular Councils.

The initiative part of the appeal presented by the Consell de Formentera against the decree that developed the Balearic Islands Law of Tourism, and the Court of the province has declared null its Section II.

Among the elements on which legislates the above mentioned title are the regulation of the the begin of a tourism activity, the inspection of activities in the sector, Intervention Plans in Tourist Areas (PIAT), the processing and effects of the statement of touristic interest and the processing of the sale of tourist places.

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To understand this sentence, we must take into account that the authority of the Government of the Balearics regarding Tourism covers the following aspects:

– Management and planning of the tourism sector.

– Management of promotion bureaux overseas

– Regulation and classification of tourism companies and establishments

– Regulation of public lines of support and promotion of tourism.

As for the Insular Councils, their regulatory authority is limited to the competencies of information, management and tourism promotion.

The Court says in the sentence that the government is not allowing the Insular Councils to regulate on matters of own powers, claiming that the regulation of various tourism issues including Title II of decree questioned by the Consell de Formentera “violates Articles 58.3 and 72.1 of the Statute of Autonomy of 2007, in conjunction with Article 70.3 and therefore incurs the defect of nullity “. It adds that the management, promotion and tourist information are “binding powers” of Insular Councils and, since 2007, “can no longer be understood that attach to the control of the Government”.

If you are thinking of to enjoy your vacation time in a holiday rental home or has a property in Mallorca and want to get a rental, please contact us. Our specialist team will advise and report on the Law of Tourism and the situation of holiday rental homes in Balearic Islands.

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News about holiday rentals in Mallorca, what should you know?

By IbizaSol

A recent article published by the newspaper El Mundo makes a radiograph of the current situation of rental accommodation in Mallorca.

In the same, is exposed the boom in both tourist and urban leases carried out through large digital platforms that have established Mallorca as a strategic destination.
As part of this business boom, has exploded the underground economy in the holiday rental sector in the Balearic Islands, in the form of illegal tourist rental.Despite the fact that are being promoted as mere intermediaries between owners and renters behind them there is a spectacular business. Contrary to what happens with hosting companies regulated, in the case of digital platforms, it is unknown whether or not users pay taxes. In fact, in many cases, the same platforms recognize that on their own web pages may have hidden businesses that violate the Tourism Law of the Balearic Islands , which expressly prohibits offer this type of property for tourist channels, and avoid thus the payment of the tax.

The absence of a clear regulation has generated many doubts in Europe about how to monitor the management of these platforms, so that the Spanish government has authorized Autonomous Communities to control and punish them, if is applicable.

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Private individuals can perfectly rent their flats under the Law of Urban Leases (LAU) without registration in the register of Govern and thus avoiding paying the eco-tax, as this state law permits short leases, so that until not modify this law, there will be this kind of rent. In the Balearics is forbidden to rent flats for tourist use, although single-family homes, where tourist services won´t be offered or the property announced on tourist channels.

It isn´t a legal problem the fact that the owner of an apartment or villa that is not qualified as a tourist can rent it per season if the services are not offered. Similarly, advertising the same channels of tourism, which is forbidden by the Balearic legislation is not enough to determine that there is infringement, since according to the LAU would also be necessary that housing was subject to a specific regime. The infringement is in the fact that the owner rents its property as tourist when the property is not qualified in this way, thus avoiding the payment of the eco-tax, so that tourists staying in their properties do not pay tax.

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Avoid this problem is possible renting your holiday villa or apartment through a specialized and experienced company. With over 15 years of experience in the Mallorca Holiday Villas industry, Balearic Villas have the experts & the know-how to create the perfect, independent-living holiday for you. As a rental division of the real estate leaders of Balearic Properties, Balearic Villas specializes in holiday rentals of luxury villas and apartments in Mallorca, Ibiza and Menorca.

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Mallorca Property Market in 2016, the current situation in numbers

By IbizaSol

Below we offer you the latest information relating to the situation of the property market in Mallorca when only missing four months to finish the year.

  • Balearic Islands is the most powerful area of the Spanish real estate market, as both Mallorca and Ibiza and Formentera are in a clear recovery process.
  • During the first quarter of this year were sold in Balears 3,066 homes, 541 more than during the same period last year, representing an increase of 21.4%. Of these, 2,361 were used and 705 new.
  • In March were sold 972 homes in the islands, 24.5% more than in the same month of 2015amply surpassing average increase of the country, 16.8%. During the month of June, home sales increased 19.4% over the same month of 2015.
  • The acquisition of private housing by foreigners continues to rise. International investors, show high confidence in the property market on the island.
  • Mallorca has become the main destination of Swedes when buying a home in recent years, because since 2013 this trend have enjoyed spectacular growth at around 80%. They have become the third nationality at the time of acquiring housing, after British and German.
  • The type of media operation is around 350,000 euros in the Bay of Palma, although in Deia, Valldemossa and in the rest of Mallorca investment far exceeds 800,000 euros.
  • In Spain, the finished housing prices has moderated in July with an increase of 0.3% over the same month of 2015, compared to 1.5% June. In the case of the Balearic Islands, the finished housing (new and used) has experienced a rise of 1.7% in July, according to the appraisal firm Tinsa.
  • In the Balearic Islands have registered in June the highest rates of annual variation of sale of estates (20.2%), according to data from the National Statistics Institute (INE).
  • According to the record of the sale of registered homes, Balearics is the community with the highest number of transmissions (136) per 100,000 inhabitants.
  • The price per square meter of housing in the Balearic Islands stood in the first quarter at 2,122 euros, the second most expensive of all communities after País Vasco, which stood at 2,190 euros, according to the General Council of Notaries.
  • The markets of the rental and resale property in the Balearic Islands are experiencing a boom evident reflecting increased demand experienced in recent times.
  • Balearic Islands is experiencing strong upward pressure by foreign demand, especially in high-end and luxury sector, which has led to an increase in
  • Calvia, is one of the most expensive areas of Spain, at a rate of 2,835 euros per square meter, and and is encouraged at a rate of 11.4% interannual and could regain its highest price in just over a year.

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As a specialist in Real Estate Law in Mallorca, we offer comprehensive advice in the process of buying and selling property. If you intend to purchase a property in Mallorca 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. 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. No doubt to contact us, we will attend you with no obligation.

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Investing in the property market in Mallorca,this is a perfect time

By AdmSolJM16

Balearics is one of the places in Spain with more interest in permanent homes, vacation rentals and other. The current moment is perfect to investing in a property in the islands since the constant revaluation is maintained for months and also has better facilities for mortgage loans; an excellent combination to generate good prospects in the sector.

Based on data from the INE (National Statistics Institute), Balearics is the community in which   more grown the interannual housing prices, at 4%.
Real estate activity has picked up significantly by the good performance of the economy in the islands, especially the last two tourist seasons, which has generated greatest richness and economic dynamism. Banks have increased granting credits for the purchase of properties, in this regard has also increased the number of companies and individuals who now see in properties a warranty investment.

Acquire housing for rent represent a gross annual return of 5%, a higher percentage than banks offer deposits and more at a time of rising prices. International investment in real estate product has grown exponentially in recent years. Of the approximately 1,100 million direct investment received in 2012 it went to 1,892 million the following year in 2014 rose to 3,010 million euros in the year. The past fiscal year, the figure increased to 3,012.5 million euros and a further increase is expected for this year.

The increase of international interest aroused by the Spanish real estate activity has, likewise, much to do with price stabilization that it has stopped falling across the board.

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Similarly, one of the major revolutions that has lived the Spanish real estate sector in recent years is the consolidation of the SOCIMI (listed companies investment in the property market), an investment linked to the rental market, which has been gaining projection in Spain. Retail customers also have the opportunity to enter the real estate sector through specialized investment funds. Most of these funds takes stakes REIT (investment vehicles in the real estate sector) carrying consolidated decades in countries like the UK, Holland and France, and are dedicated to buy buildings, offices or malls, put them in rent and distribute dividends to its shareholders.

We offer legal assistance regarding funds from other countries for investment in real estate and business. Our team has extensive international experience and cooperation agreements with international firms. We are also members of the Association of International Property Professionals (AIPP).

Our clients know to turn to us with any legal matter, and that if the particular issue is beyond the scope of our practice areas, we will assist them in finding the professional assistance that is required.

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The Brexit and its consequences for Mallorcan property market

By IbizaSol

Much has been said in the last weeks of the consequences of Brexit for the property market in Mallorca and Spain. Since the referendum held last June, the pound has dropped more than 10% in value. Because of this, several investment funds in the Balearic property sector suspended trading before the rain redemption orders.

So, the situation doesn’t seem beneficial for the real estate sector in England, however, this situation has a positive impact in the short to medium term real estate in Spain.
The impact of Brexit has meant the loss of value of sterling by about 10% against the euro. This implies a loss of purchasing power for buyers; despite this, the Balearic Islands are one of the main destinations for British investment. The current situation is beneficial for them and are interested in investing for reasons of proximity, connections, climate and quality of life.

Real estate sales have increased by 79% in the first half of the year. The price has increased in some cases up to 59% and in some areas of the island is taking the case that the supply is unable to meet demand. The real estate market has emerged mainly in the investment side and in relation to British investors are expected to increase their investments in our country, as high interest remains in the residential. The Spanish property market offers great opportunities and high returns for the British and the Balearic Islands are presented as an attractive investment in the medium and long term.

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After all the foregoing arises a positive impact of the Brexit on the Spanish real estate market, in fact many non-EU buyers have already begun to look for alternative places to London that offer good investment potential. The number of British citizens seeking to move abroad has increased by 30% and Mallorca is at the top of their searches.

Buying a property in a foreign country can be a complicated affair and fraught with formalities and obligations that the purchaser might be completely unaware of until it is possibly too late. Ripoll Mateu Solicitors Mallorca understand that the process of buying a property in Spain differs from that in the UK. We can advise you on all matters relating to the purchase of your property, for foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business.

We specialise in Real Estate Law and leg