Illegal Rental Fines

[SurfJames]

And yet, despite all of this, apartments are still being advertised for sale as "having exceptional rental potential".

http://goldacreestates.com/Property?Country=jandia+golf&AAL1=&Options=QuickFind&Back=1828034137&pricemin=min&pricemax=max&bedsmax=All&PType=All&furnished=&refcode=

Sad really ... ... ...

These agents are pretty despicable. They know the situation better than others, but still pedal their lies to punters.

Owning property has become a nightmare for so many. Folk are trapped between taking a risk with letting or default on the mortgages. Have a quick look at one of the main property portals. There are still the same names renting out their apartments.....and they must all know the risk. They must be living under a cloud of constant nervousness.

The big issue is that as soon as you own a property, you become a victim (sucker) for taxation. You cannot hide or walk away. And the authorities make the rules more and more complex to sucker more and more euros out of your pocket. Especially now that Spain has been declared insolvent and people are advised to get their money out asap.

But it's also happening in the UK. A recent case has determined that you can no-longer rent out a property for holiday lets, unless you get planning permission for change of use. It's only a matter of time before fines start to follow over here.

This is just another form of corruption being imposed by bankers. They control everything and their impact is being felt in every corner of the World.

Any potential buyer looking at Fuerte at the moment....DON'T. DON'T DON'T !!!!!

The answer is go for a long-term rent. Don't become another victim of corrupt officials.

[Ivemovedon]

The blame for mis-selling lies squarely with the authorities who should have clamped down on agencies years ago even when the rental laws weren't being enforced. But hey why bother, just wait till they've all bought then hit them with the law and the fines to go with it. And when the complaints come in just say you should have researched it better,knowing full well every estate agent and solicitor on the island was complicit in the cover up , agents for actively promoting rentals and solicitors for conveniently not mentioning it may be unlawful in case they lost their conveyancing fees.

I'd say its a great time to buy if you are using it for your own retirement or you are just fortunate enough not to have to rent. I've seen property on the market they are virtually giving away.

[RVEEE]

I bought my property as an existing rental 'business' some years back, with a view to subsidising the substantial mortgage until I was able to retire. Not for profit but just to help with the costs.

I'm now no longer able to rent out and have had to sell my house in the UK to find the cash to pay the mortgage.

I was meticulous in enquiring with estate agents and solicitors as to whether I was in the clear as there have been many stories in 'Holiday Homes from Hell' programs regarding Spain. The amount of money that I've pumped into that mortgage could have paid for several dozen world cruises.

I've had a quick poll in work and found a couple of people who never stay in hotels but will be going to Florida in future. The sort of person who rents a house is not going to be diverted into a hotel by these regulations.

[lander]

Hi RVEEE, really sad to hear your plight, we too checked every possible angle but were lied to from start to finish, there is no doubt that the authorities encouraged this because they made money from every property purchase.  I have also asked numerous people if they would go back to staying in Hotels or package holidays and the answer is always NO, you either like that kind of holiday or you don't.  The sad thing is that like the recent changes to the Coastal Laws these laws will probably be changed one day when they realise the damage it causes to the local economy.  Also for those people who think that "stopping a few rental properties won't make much difference" there are over 800 such properties listed for Fuerteventura on just 1 website alone! People seem to forget that apart from the money the guests spend during their stay that the owners are paying local authority taxes, community bills, as well as spending a fortune in shops such as NortySur, Armas., Rocassa etc.,  as things need replacing on a regular basis.     

[Blueboy7]

I have just came back from a weeks holiday on the Island I was talking with a couple of old mates who both rent three villas out between them, one of them reckons his solicitor recently told him to ignore the law and plead ignorant if he gets caught, the solicitor reckons getting caught is highly unlikely. Their villas are fully booked up until October and both are advertising on the internet. Read into that what you will, I don't rent my villa out, be interesting to see what happens in the long run.

[lander]

That's exactly what we were told by our Lawyer.  Went to see him last year to ask why he had told us in writing that we were allowed to rent out our property, he basically said that it had "kind of" been common knowledge that this law didn't work for Fuerteventura and at that time nobody thought it would ever be put into practice.  He also thinks it would be a disaster for the economy (and his pockets)!

[TheCooler]

Perhaps getting caught is highly unlikely, but it's a hefty fine , and a lot of worry if you are one of the unlucky ones.

[peejay]

Pleading ignorance to the law is no defence unfortunately. And the fines are imposed automatically, they don't have to take you to court to prove the offence. To prevent your property being embargoed, you have to pay the fine upfront or lodge the money with the court during the appeal process. So it is a pretty bad situation if you get caught, though up to now the inspectors have been much less busy in Fuerte than on the other islands.

[Ivemovedon]

Doubt very much if this will be the last assault on foriegn home owners. I have read that Malta has a different price for utilities , ie water and electricity, for expats and non residents. Yes you've guessed it, much higher than for residents. It is apparently being challenged by the EU. I think we should maybe keep our fingers crossed it is  eventually deemed unlawful as i wouldn't mind betting Spain is watching the situation very closely.

I fully expect us to leave the EU in the near future and without the protection of the slightly erratic equality laws i also expect the Spanish to take full advantage of the fact.

Hope i'm wrong.

[peejay]

OK big news this morning, cut and pasted from Janet Anscombe's website in Tenerife:

First illegal lettings appeals reach Court
Published 20 May 2013
The first appeals of fines issued under the Plan Especial went to Court last Thursday. Before the hearing, however, the judge called Alotca lawyer José Escobedo and the Government's lawyer into a meeting. Also present were a legal assistant from Tenerife Litigation (the office of the two Alotca lawyers, José Escobedo and Santiago Saenz), and the two chief Turismo inspectors.

Before I talk about the meeting I would like to clarify two things that have been the subject of much discussion and rumour. First, the judge confirmed that Canarian law is valid, and applicable, to these cases of fines against individuals for private holiday rentals. Secondly, he confirmed that previous judgments concerning "prior authorization" have no relevance at all to them.

The judge requested the meeting because he had certain things to say in general terms about the specific cases being heard and others like them still to come to hearing. These were that he considered the fine amount to be disproportionate (as I've previously posted, proportionality of punishment is written into the Spanish constitution); that Alotca lawyers had prepared a strong and detailed defence; that the Government nonetheless had a case that could be developed during a hearing; that such cases would take a considerable time to hear; and there were so many of them that Court time would be inordinate. As a result, he had consulted with other judges and it had been decided that all cases would be heard by that same judge through the one Court, number 4 in Santa Cruz.

Having made these comments, the judge then asked that a class action be formed for an out of Court settlement which would apply to all the appeals underway at present. Since Alotca has the vast majority of cases to be heard, and was behind the first appeals to be heard, the class action is to be conducted through Alotca, with cases being handled by other lawyers forming part of the Alotca action. The settlement will require a document to be signed by the appellants acknowledging that they had been in error, that this error had resulted in a breach of the law, that they accept a fine as punishment, and, naturally, confirm that there will be no future breaches. The document will stand as a legal judgment so that even with an out of Court settlement, any future fines arising from continued letting would be at the second offence level of up to €30,000.

The Government has been given a month to liaise with José Escobedo and Santiago Saenz to negotiate the settlement, involving the final document to be signed and the level of the fine: the judge said that in his opinion, it would reasonably be in the region of €5,000. The Court provided José Escobedo with a list of all cases involving other lawyers, and any appellant with a non-Alotca lawyer who wishes to join the class action must instruct their lawyer urgently to contact Tenerife Litigation so that their cases can be presented to Court as part of that action. Those who are already with one of the two Alotca lawyers need do nothing.

There is a video recording of Thursday's meeting which I watched this afternoon. I will have a copy uploaded onto my website as soon as it can be transposed into a file in a format that I can upload. I am dependent on the help of others to do this, so please bear with me.

José and Santiago ask that any enquiries come via me to free them up to get on with this work. Evidently they expect to hear directly from lawyers of those who have been fined and who are to join the class action. In terms of general questions, however, they ask people to email me. If anyone has just received a fine, or does so over the next few weeks, please also contact me urgently to find out what Alotca lawyers will need so that time is not wasted with them answering basic initial questions.

On a wider basis, Alotca is about to start negotiations with the OCU (organización de consumidores y usuarios), the Spanish Consumers Organization, which is preparing to fight the recently announced national proposals to limit tourist letting throughout Spain. The fight is very far from over, but with regard to the fines issued so far, we at last have clarity.

[peejay]

I have just checked with Janet and owners fined on Fuerteventura can also join the class action to hopefully get their fines reduced from 18,000 euros to 5,000 euros.

Anyone affected needs to email Janet direct, her website is: http://www.janetanscombe.com/ or ask their solicitors to get in touch with Tenerife Litigation so they can be added to the class action.

[lander]

Hi Peejay, thanks for the info, very interesting, looks like they are starting to realise that getting fines paid by people is not going to be that easy.  The judgement seems to assume that people were renting their properties in the knowledge that they were flouting the Law, I would like to know what happens if you refuse to pay the fine on the basis that you asked all the right questions regarding renting but were lied to by every party involved, in my eyes that's not the same as pleading "ignorance of the Law" so I wonder where we would stand.

[bobbieball]

That's exactly what we were told by our Lawyer.  Went to see him last year to ask why he had told us in writing that we were allowed to rent out our property, he basically said that it had "kind of" been common knowledge that this law didn't work for Fuerteventura and at that time nobody thought it would ever be put into practice.  He also thinks it would be a disaster for the economy (and his pockets)!

If you have it in writing i would suggest that you contact one of the large law firms on the mainland & see if it is possible to sue your lawyer.

[lander]

Bobbie that's exactly what we would do if or when we get a fine, although said Lawyer has told us that he would represent us if that happened!  In the meantime I'm just hoping that they see sense and change this Law, issue Licences, make an annual charge for them and make money rather than risk driving lot's of owners (and their money) away

[peejay]

Don't think it's so much paying the fines. They add interest if you don't pay immediately and will embargo your bank account and if necessary seize your property to recover the money. It's more the risk of completely paralysing the court system with potentially thousands of appeals. If you have proof in writing that you were lied to it could be worth suing. Can't see them changing the legislation any time soon, it's a nice little earner 7,000 cases x 5,000 euros is 35 million euros! Of course not all the cases will be proven, but even so, kerching!

[Ivemovedon]

Not sure i see the point of seizing a property you cant sell or get any immediate monetary gain from. sounds a bit of a minefield. I'm not too sure they'd get anywhere near 5000 euros out of most peoples  spanish bank accounts either, they certainly wouldn't out of mine. Just enough trickling in and out to keep the place running. Could be they'd be biting off more than they can chew in that direction. Has that actually happened to anyone here or on tenerife?. (ere we go again)

[peejay]

I think the Tenerife Litigation solicitors working for the majority of people fined managed to come to an agreement with the authorities whereby those people fined deposited the fine amount with the court while they appealed the fine - thereby preventing the risk of embargo. If people's appeals were successful or they had the fine reduced they would then get all or some of the money back. It is shocking though that the fines can be raised automatically and you are expected to pay them before the conclusion of any appeal process. No such thing as innocent until proven guilty, in this instance it seems to be the other way round. And of course all the time the courts have your money, presumably they are gaining the interest on it. Another nice little earner with thousands of cases.

[bobbieball]

Bobbie that's exactly what we would do if or when we get a fine, although said Lawyer has told us that he would represent us if that happened!  In the meantime I'm just hoping that they see sense and change this Law, issue Licences, make an annual charge for them and make money rather than risk driving lot's of owners (and their money) away

If you get a fine you would have to pay it as has been proven in the latest appeal courts, i think your lawyer would back out very quickly as he could face prosecution & the lose of his licence to practice law as he knowingly gave false information.

[bobbieball]

Not sure i see the point of seizing a property you cant sell or get any immediate monetary gain from. sounds a bit of a minefield. I'm not too sure they'd get anywhere near 5000 euros out of most peoples  spanish bank accounts either, they certainly wouldn't out of mine. Just enough trickling in and out to keep the place running. Could be they'd be biting off more than they can chew in that direction. Has that actually happened to anyone here or on tenerife?. (ere we go again)
[/quote
The embargo on a property will remain there until the property is sold or inherited at which point the money owed will be automatically  passed to the issuer of the embargo via the notary. as far as an embargo on a bank account is concerned they will take a percentage each month of the monies that are trickling in & out until the debt is paid no matter how long it takes. Oh & don't forget they can charge interest of up to 20% (B***T**DS)   

[Ivemovedon]

They appear to have all routes covered. . However it seems a lot of time and effort to go through to claw in what is now a measly 5000 euros. When the fines were a gargantuan 18000 or more it would have been well worth it, but over time it will more than likely cost them more in admin fees and associated wages of the enforcercing officialdom. And lets not forget its not quite over yet on the appeal front.I reckon if only a fraction of people mucked them about they would end up out of pocket. And glad i am to say so.

[lander]

Stedge, they might think they have it covered, but how many people are actually going to pay the fines?  Like you say most owners only trickle money into their bank to cover bills, a lot of properties are in negative equity so they wouldn't get money from that either, but it would take an awful lot of time and money pursuing fines.  Most owners I have spoken to (and it's quite a lot) are so fed up with this situation that if it came to a fine they would just give them the keys to their (worthless) properties and tell them where to stick it! 

[peejay]

Problem is under Spanish Mortgage Law you are still liable for the full outstanding mortgage amount even if you are in negative equity or hand the keys back or whatever. And if you have property in the UK they can go to court to seize that to pay what you owe. The debt can hang over you for the rest of your life basically. Sometimes you can agree a Dacion en Pago with the bank, to write off the debt if you hand back the keys, but the banks are under no obligation to do this and have been reluctant to do it due to the number of people getting into trouble with their mortgages. The EU are unhappy with Spanish Mortgage Law, but I don't think they have moved to make them change it yet.

Also, if you hand back the property or sell it and don't pay the fine, they transfer the debt onto you as an individual and may try to come after you in the UK for payment.

[peejay]

It's worth bearing in mind that copies of your internet advert alone are no longer deemed sufficient evidence to prove you are illegally letting.

Now teams of so-called Tourism Quality Surveyors are visiting properties and asking guests to complete and sign a questionnaire which basically contains all the evidence they need of holiday letting, so they can raise a fine.

This has been going on in Tenerife and they have apparently visited Playa Blanca as well, but no reports of them in Fuerte as yet. It is much easier and cost effective  for them to hit Tenerife, especially if the level of fines is reduced to 5,000 euros for a first offence. But I would imagine they will hit the main resorts here too at some point.

[Ivemovedon]

I'm just hoping that at the end of it all when the fines have been whittled down as far as they can go, and with the maximum amount of opposition, and all the hard work it will entail to try and get it it might just prove an unworthwhile goose chase. And if it does it will be a very deserving and fitting end to it all.

[adewass]

Surely if they have inspectors that call at properties and ask if you are a tourist who is letting the property, you could just claim to be a family member who is staying free of charge? How can any inspector prove that you have paid to let the property (as long as there is an agreement between the owner and the person letting the property that no money has changed hands)? Also I have seen an advertisment for an apartment on the golf course in Caleta where the rental is free, but you have to pay a cleaning fee. Is this someone who is trying to be clever and get around an actual rental fee?

[Spike On Q]

So - you are letting your property to a complete stranger who has seen your ad. on a bona fidea web site. After they've made the booking you tell them that if any government official calls whilst they are in residence to check if the property is being let legally and complies with various safety and other regulations they should lie through their back teeth on your behalf - mmmmm I wonder would you?

[adewass]

No I'm not the one letting the property out, I'm the one who is renting the property from an owner. And yes I would be prepared to tell any inspector that I'm a family member who is just staying at the property free of charge. I have just arranged to hire a villa and an apartment from someone who owns both and if they asked me to say that I was a family member then yes that is what I would do. If this means that I can still rent a property (short term) and not have to stay in a hotel then I would gladly do it.

[Ivemovedon]

yep i would and i'd also want to know why they were knocking on my door wasting my valuable holiday time trying to get me to squeal on an owner who has provided me with such wonderful acommodation . Theres only so many 'safety regulations' you can impose on an apartment, Safety regulations the industry has been happy to not worry about for the last 25 years. I doubt there will be any more electrocutions, drownings or cuts and bruises than there were before the imposition of 'regulations' and inspectors making a nuisance of themselves. So yep i'd lie through my back teeth because i value the right to rent your own property and also because the apartment i'm in is probably no different dangerwise from the countless ones i've stayed in since i was old enough to go abroard.. and thats a long time ago

[adewass]

Totally agree Stedge..

[peejay]

I've heard they ask you lots of personal questions about the owner, as you would presumably know all about them if you were a genuine friend or family. Regardless though if some inspector type rocked up while I was on hols and started asking lots of questions, I would tell them to do one. But some people have felt intimidated and made to fill in the questionnaire, dobbing in the owner. A sad state of affairs all round.