The Spanish regulation of tourist licences for holiday properties – The regulation
In the last decade, the rental of private properties in Spain by private owners has increased dramatically.
From an occasional and scarce activity it has developed into a whole new industry – the estimates are that there are in Spain (at November 2014) around 200,000 properties rented out in this fashion, with only half of those agreements made in an entirely legal way.
The figures made the tourism industry in Spain react against an activity that was affecting its business.
The Spanish legislator reacted also in 2013 separating these leases from the common rental agreements for residences and at the same time ceding to the regions the authority to rule these rentals.
The regions had to deal then with an activity in the rise and with some characteristics of concern:
- The rentals are usually of short term – the average stay in these sorts of contracts is a week – so the tenant tends to care less for the property.
- Also because of the short time of the agreement, it is difficult to get a deposit of the tenants to cover damages.
- The average age of the tenants / tourist is low, and the younger the tenant the less they will care for the property.
- As the rent is normally agreed regardless of the actual number of people that will stay in the property, the more the people the cheaper the stay will be. This leads to crowed apartments, which multiply the possible problems and specifically the damages to the properties.
- Many agreements are closed in an informal fashion, without even a written contract, a situation which leads to disputes. Also, the rents of agreements are in most occasions dealt on a cash basis, hence the income remains opaque to the taxman.
To prevent any problems, the communities passed rules trying to organise and control these private agreements, obviously with different levels of control depending on the difference geographical and weather conditions, the number of visitors and other particular circumstances.
The comments below provides a mere guidance – anybody keen to rent a property to spend a short period in Spain should check that the property is legally marketed and offered, mainly by checking its registration for tourist purposes in the local council, and also reviewing the license granted.
It is very common that the property owners (and even real estate agents) will claim that “the property needs no license for short period” or that the “license has been applied for and this suffice”.
This is, in most occasions, not true. The rental made by private parties is heavily regulated (and in three regions of Spain it is actually prohibited), so the potential tenant should check in the local authority the registration of the property and the license in place (the basic scheme in most of Spain), and also if there are other precise conditions to comply with.
The absence of these checks might lead to the tenant to be fined, acquire a liability or a financial loss. On the side of the landlord and illegal rental it will mean fines.
To prevent rentals outside of the law, all the regions have organized a body of inspectors that visit regularly the tourist areas.
Main lines of regulation of each Autonomous Community
The region of Andalucía has one of the largest and more varied offers of touristic destinations in Europe. This offer includes beaches and coast, mountains and also big cities. However the previous, the regional authority has had a rather erratic regulation until very recently, June 2014, in which the private rentals got completely out of hand and generated large sums undeclared - the issue was tackled then with a set of strict rules.
The main lines of the regional regulation are:
- The owner of a property regularly rented for short holiday terms, must have the said property registered.
- The rentals must be in written and with a mention of the registration number of the property.
- The rural houses have a different regulation.
- The regional authority will set the number of properties licensed, and will be able to increase or reduce this number.
The region of Aragón is landlocked, but does have a tradition of rural properties. These must be licensed and registered.
The region of Asturias has both coast and very highly regarded and visited rural areas. The regulation for both has been set under a license and registration basis, with a special care of the preservation of the very rich rural environment of the region.
The Balearic Islands has been for long time a traditional holiday destination. However, this has provoked an over-construction in some areas and beaches that has affected seriously the environment. To prevent further damage in the Islands, the regional Government has banned completely the private agreements for holidays. Also, the local authorities inspect regularly the rural zones, in which the rentals are allow, yet with serious restrictions, to prevent prohibited rentals.
With very benign weather conditions virtually all year, the tourist industry in the Canaries virtually supports the local economy. It was the first region of Spain to regulate private rentals, back in 1995. It has gone, though, through numerous problems due to the chronic political instability – the Governments change frequently and with them the regulation. Also, within the Canaries, the tourist activities are regulated directly by each island authority, the “Cabildo” which in every island decides the number of licenses to be granted.
After a massive request for licenses in the last two years, some of the Islands have frozen the concessions of licenses. It is important to note also that with one of the highest tourist offers in the world attending the number of units, the private rentals is an activity closely watched by the local authorities. The local inspectors are quite visible in the tourist areas checking the properties rented.
Geographically next to Asturias, the region of Cantabria has also a coast and a very rich mountainous area. From March 2014 the local legislator issued the rule to organize the short term rent for holiday purposes of properties in those two different environments. The regulation is based in the scheme license and registration of the properties.
Castilla La Mancha
The Castilla La Mancha region is landlocked and virtually has no demand for short term holiday properties. Thus, there is only a rule for rural properties based in license and registration of the property as holiday unit.
This region is one of the three in Spain (together with Extremadura and La Rioja) that bans not only the holiday / short term rentals, but also the offer or marketing of any accommodation for holidays made by individuals.
The region of Cataluña has at the same time a long coast with quite sought after destinations, remarkable mountains (the Pyrenees) and one of the most vibrant and visited citizens in Europe, Barcelona.
However, the regulation on this matter has been traditionally scarce and has lagged behind the large volume of tourists who regularly visit the region. This situation made the headlines by summer 2014 when the number of rentals in the city of Barcelona, both legal and illegal, was so high and got so much out of control that there were numerous damages in several buildings and also in the very streets of the town´s centre. As a result, the Barcelona Council froze indefinitively the license concessions.
In Cataluña, the tourist licenses for properties in the coast and cities are granted by the Councils (ayuntamientos).
Cataluña has also a very sought after sort of rural houses for short stays. These are offered by proprietors and also by agencies. However, it is important to note that the renting of these properties is heavily regulated – most houses are licensed only for farming and agricultural purposes, and not for short stays.
As with Castilla León, the short term rentals for holidays are banned in this region.
The regulation of both the rural houses and the holiday properties is made on a license plus property registration basis. Galicia does have coast and very rich rural areas. However, as it is not a region that has suffered of massive visits of tourists, the mentioned regulation is quite flexible and new licenses are issued regularly.
As with Castilla León and Extremadura, this region does not allow for private rental of holiday properties.
In spite of being one of the most visited cities in Spain, Madrid did not have a regulation on tourist properties until very recently (summer 2014). However, the local authorities estimate that the number of properties in the region regularly rented between private parties is around 8,000.
Since the recent rule was passed, the activity in the region is organized on the registration of the property, the licensing and other local requisites, such as, amongst others, fixed prices and a minimum stay of five nights.
The regulation of tourist licenses in Murcia is generally allowed, in the basis of registration and licensing of the property.
The Navarra region is landlocked. It allows its rural houses to be rented for short periods, but with strict conditions to help and preserve the houses listed as traditional constructions.
The short term rentals are yet to be fully regulated. The current Law was issued in 1994 and the regional Government has promised an amendment soon. The private owners can lease their properties for holiday terms, with the contracts then being then subject to the General Leases and Rentals.
It is generally allowed within the licensing property registration scheme.