Crackdown on illegal holiday lettings

[SurfJames]

quote:Originally posted by falkirkdan

What happens if you have rented a property for a holiday.   Say one as advertised on reputable sites and have paid the rental and the property police come along and declare it "illegal" ??

Hi Dan,

My understanding is that you won't be penalised as the renter. Also, you are able to rent out your property 'long term' but not for holidays.

I reckon you would need to avoid the main-stream sites such as owners direct. Advertise locally at home. Then ask for a voluntary contribution towards the running costs, which just happens to be the same amount as the rent you would have charged via owners direct. []

You then need to inform the renters about the situation and ask them to give your name and address if they get a phone call...the inspectors are not actually knocking on doors....yet!

Infact, you could do the whole thing for cash...but I couldn't possibly suggest that this would be the way forward...[][][8D]

[fifi]

Thanks Surfjames, hope you get better soon and back to your running. I was having a look through the Boletins earlier (they show the fines which they have been unable to physically serve on people as far as I know) and the majority of people have been fined €18,000. The highest so far that I have seen was €24,000. From reading other Forums advertising on websites like Holiday Lettings and Owners Direct were one of the main ways that people were caught. I noticed a couple of months back that some of the Inspectors seem to be Czech or Polish (if you look at the names on some of the Denuncias). The Inspectors have visited one the Golf course areas in Caleta and collected names. It was published in their EGM.

[fifi]

quote:Originally posted by falkirkdan

What happens if you have rented a property for a holiday.   Say one as advertised on reputable sites and have paid the rental and the property police come along and declare it "illegal" ??

I suppose if someone was fined €18,000 they would not want to take the chance of being fined a second time. The first offence can be up to €30,000. The fines go up for a second offence. First offense is "Grave" and second is "Muy Grave" with fines to match the "crime"

[SurfJames]

So they are actually visiting places, Fifi, and not just making phone calls?

I'm surprised they are actually doing this in Fuerteventura, because there isn't enough hotels to fill the demand for holidays. Whereas, the other islands have huge hotel complexes.

7000 x 18,000 = E126,000,0000 !! Easy money.

I did a quick search on Owners Direct this afternoon, and there still seems to be loads of adverts, although some have definitely been removed.

Do you think this will have an impact on house prices? I'm still looking to buy in Corralejo and will have the funds early next year.

[kevin2003]

quote:Originally posted by SurfJames

I'm still looking to buy in Corralejo and will have the funds early next year.

In my opinion we have two to three more years before property prices reach their floor here.

[fifi]

Yes its a handy way of making money allright. All of the Islands are effected by this letting law Surfjames.

This is worth reading if you are interested in the Property market. Wait a while because property prices are expected to drop another 7% by mid 2012  http://www.eurojuris.net/eng/publication-detail.asp?PublicationId=321

[SurfJames]

Thanks guys.

Always difficult to know when to buy in these uncertain times.

If the Euro crashes out,then Spain will have to devalue it's new curency. But, I reckon the Euro is here to stay.

Cash is king...as they say.

[Canary dweller]

Fifi
Excellent research by you, as always
Well done

[waggy]

quote:Originally posted by kevin2003

quote:Originally posted by SurfJames

I'm still looking to buy in Corralejo and will have the funds early next year.

In my opinion we have two to three more years before property prices reach their floor here.

I think you're wrong there James. In feb this year that huge, 3 block hotel on the front at Caleta was largely unused. One block was totally empty, the middle one had only a few appts in use but the one nearest the pool and other facilities seemed to be in full swing.
In El Cotillo,  the new hotel, which I think only opened 6 mths previously had been moth-balled for lack of interest.
When we tried to book a private appt in El Cotillo, as we usually do, everything was booked up months in advance and, for the second time running, we've had to take our 2nd or 3rd choice of appt types.
 So I reckon the private appt trade is hurting the expansion of the hotel trade. I can just see the hotel lobbyers working overtime on the Govt depts responsible to take whatever action they can cook up to 'adjust' the situation and make some tax revenue at the same time.
Every tax avoider in Greece, Spain and now Italy is being stung at the moment nut, as has been observed here, it's a very short term/sighted, knee-jerk way of doing things.

Wait until dependant jobs start to disappear and services start to fold. It'll take years to put things right again. The local working popn will suffer.
 I take the point about a different kind of tourism, but again, that will impact badly on the frequency , availability and cost of flights. Some carriers would just drop the place like a hot brick.
There doesn't seem to be any strategic joined-up thinking here.

[waggy]

quote:Originally posted by SurfJames

So they are actually visiting places, Fifi, and not just making phone calls?

I'm surprised they are actually doing this in Fuerteventura, because there isn't enough hotels to fill the demand for holidays. Whereas, the other islands have huge hotel complexes.

7000 x 18,000 = E126,000,0000 !! Easy money.

I did a quick search on Owners Direct this afternoon, and there still seems to be loads of adverts, although some have definitely been removed.

Do you think this will have an impact on house prices? I'm still looking to buy in Corralejo and will have the funds early next year.

Sorry, James, that last post should have been referenced to this one of yours.

[quarry901]

Has anyone either owners, media, local or national parties actually sat down with the Canarian gov and pointed out the possible end result of these fines and distruption to the economy

[fifi]

There is a Public meeting on 15th December Quarry and everyone affected by this is invited to attend. You can read about it here http://www.janetanscombe.com/news/illegal-holiday-let-inspections-and-fines-situation-continued.html

[fifi]

quote:Originally posted by Canary dweller

Fifi
Excellent research by you, as always
Well done

Thanks CanaryDweller.[]

[waybo]

"There is a Public meeting on 15th December Quarry and everyone effected by this is invited to attend."
_____________________________________________________________________________________________________
This meeting is on Tenerife.
Fly?
Sail?

[fifi]

Whatever way takes your fancy Waybo.[]

[emmi]

The first long and succinct post by "alanadale" pointing out what would happen to the local economy on all levels is brilliant.  I think it should be read out at the meeting on behalf of all people affected by this rather stupid "rule".  It seems to me that the government just have not thought this through.

[fifi]

The Islands tourism numbers increased because of the new flights which came on board. It remains to be seen if contracts will be signed again. Rumours are already around that Fuerteventura is not one of Ryanairs favourite routes and may be dropped (two sources so far,and a few of us Forumers are trying to  follow up on this at the moment).

There are incentives being given to owners of Hotels and Apartment complexes to upgrade to a higher star rating in Fuerteventura. This is working and 20 million is being spent upgrading complexes in Corralejo as a result of it.

According to Agueda Montelongo the Department of Tourism  want all Tourist accommodation to be regulated and listed on one website so that at any given time they will know exactly how many Tourist beds are available. The website has already been organised. I can understand that and it is fair enough.

 As far as I can see they just want to put a stop to the private lettings alltogether and fill the existing Hotels and Apartment complexes which are easier to regulate. If they lose the flights their whole plan will fail. It is a case of too much too soon I think.

[potash]

Fifi,s quote is on the money

The Islands tourism numbers increased because of the new flights which came on board. It remains to be seen if contracts will be signed again. Rumours are already around that Fuerteventura is not one of Ryanairs favourite routes and may be dropped (two sources so far,and a few of us Forumers are trying to follow up on this at the moment).

[fifi]

One of the incentives given to all of the airlines was based on increasing passenger numbers. The special incentives were the reason so many airlines all of a sudden took an interest in the Canary Islands.

 Passenger numbers will fall without the DIY Tourists who book private accommodation which is much more affordable in many instances than Tourist accommodation and the incentives will not be awarded then to  ANY of the airlines. Will they stay or will they go?  Food for thought.

[Julian]

Does this 'ruling' apply to Mainland Spain as well, or are they just mugging the islands?

[fifi]

The law is different in mainland Spain Julian but in some parts they do want owners to have a license. It is similar I think in the Balearics but I dont know if there are huge fines like there are the Canaries.

              ...................


I contacted one of the leading insurers Intasure, to see whether their Public Liability cover would pay out if I were to let out my bungalow. They have  5 million Public Liability cover included in their policies.
 This is their reply

Dear Fifi

In regards to your query regarding insuring a property in the Canary Islands.



Our underwriters have said 'Our policy would not pay any claims if the assured was taking part in an illegal activity'.



They also went on to say that they can't understand why this law would be brought in considering the country must receives such a large income from tourism.



Sorry we cannot be of help in this instance.



Kind regards,

Ronny Walker

www.intasure.com

[SurfJames]

quote:Originally posted by fifi

The law is different in mainland Spain Julian but in some parts they do want owners to have a license. It is similar I think in the Balearics but I dont know if there are huge fines like there are the Canaries.

              ...................


I contacted one of the leading insurers Intasure, to see whether their Public Liability cover would pay out if I were to let out my bungalow. They have  5 million Public Liability cover included in their policies.
 This is their reply

Dear Fifi

In regards to your query regarding insuring a property in the Canary Islands.



Our underwriters have said 'Our policy would not pay any claims if the assured was taking part in an illegal activity'.



They also went on to say that they can't understand why this law would be brought in considering the country must receives such a large income from tourism.



Sorry we cannot be of help in this instance.



Kind regards,

Ronny Walker

www.intasure.com

OMG Fifi ...

This means that anyone who lets out a property has, in effect, worthless insurance. If anything happens involving their property, the insurers will not pay out. And we all know just how cunning they are at wriggling out of claims.

There must be thousands of owners who have zero public liability, but who think they are covered. Imagine if a renter fell down the stairs and you were not insured...you could face an enormous bill, that could also threaten your assets in the UK.

This really is one enormous mess.[!]

[fifi]

Its like all policies, the small print is never highlighted until you try and claim Surfjames.

They do cover for earthquake damage but not Tsunamis though.[][][][]

[fifi]

Im just having a look through the Boletins.http://www.gobcan.es/boc/2011/244/015.html

 Earlier on in this thread I mentioned that the fines are graded "Grave" (Serious) and "Muy Graves". (Very serious). First offences for illegal letting are considered "Grave". The majority of the fines are still the minimum amount of €18000, but one thing I never noticed before was that the "Muy Graves" (second offence) seems to have a fine of €150,000 or over, unless I am reading it wrong. Have a look and see if you think I am right. (Link above with this case translated by Google)

 A snippet from one of the Boletins from 14th. I deleted the persons NIE number and name. This woman was fined €18000 for not having an inspection book and lacking complaint forms. These are the two offences that always show up in the Letting cases. She  was caught in January but it is only appearing in the Boletin now because they were obviously unable to find her to serve papers on her.

First tourist exploitation .- No 331 apartment complex called El Marques Palace, lacking the inspection book.

Second tourist exploitation .- No 331 apartment complex called El Marques Palace, lacking the complaint forms.

The facts outlined above stem from advertising and related information contained in the website and the report issued by the Tourism Inspection Service dated January 31, 2011.

DATE OF VIOLATION:

Fact One: January 25, 2011.

Fact two: January 25, 2011.

SUBSTANTIVE RULES VIOLATED:

Done first: Article 84 of Law 7 / 1995 of April 6, Management of Tourism in the Canary Islands (BOC n º 48, April 19), in conjunction with Article 41 of Decree 190/1996, of August 1 , regulating the procedure for the exercise of sanctioning powers in tourism and tourism inspection (BOC n º 103 of August 21).

Fact two: Article 20.1 of Law 7 / 1995 of April 6, Management of Tourism in the Canary Islands (BOC n º 48, April 19) in conjunction with Article 8 of Decree 168/1996 of 4 July, which regulates the characteristics of the complaint forms and procedure for handling complaints (BOC n º 88, July 22).

CHARACTERIZATION OF VIOLATION:

Done first: Article 76.9 of Law 7 / 1995 of April 6, Management of Tourism in the Canary Islands (BOC n º 48, April 19).

Fact two: Article 76.4 of Law 7 / 1995 of April 6, Management of Tourism in the Canary Islands (BOC n º 48, April 19), amended by Law 14/2009, of December 30 (BOC n º 2 of 5.1.10).

LEGAL STATUS OF THE VIOLATIONS:

Done first: serious.

Fact two: severe.

PENALTIES THAT MAY APPLY:

Done first: 9000.00 euros.

Fact second: 9000.00 euros.

BODY

Spanish ...Para las infracciones calificadas como muy graves es competente para resolver el Gobierno de Canarias para las sanciones de multa superiores a 150.253,03 euros

For very serious offenses classified as muy graves to solve the Canary Islands Government  sanctions over 150,253.03 euros fine and the Hon. Mr. President of the Canary Islands to the penalties of a fine up to that amount, according to the provisions of Article 80.1.a) and b) of Law 7 / 1995 of April 6, Management of Tourism in the Canary Islands (BOC No. 48, April 19) and Art degrees. 3.3.m) of Decree 240/2008 of 23 December, which approves the Organic Regulations of the Department of Tourism (BOC n º 3, 1/7/09), effective in accordance with the transitional provisions of the Decree 170/2011 of 12 July, which determines the structure and peripheral and central headquarters of the ministries of the Canary Islands (BOC n º 138 of July 14), classified as serious for the jurisdiction to the resolution, the Hon. Deputy Minister of Tourism, in accordance with Article 80.2 of Law 7 / 1995 of April 6, Management of Tourism in the Canary Islands (BOC n º 48, April 19) and Art degrees. 4.2.o) of Decree 240/2008 of 23 December, which approves the Organic Regulations of the Department of Tourism (BOC n º 3, 1/7/09), effective in accordance with the transitional provisions of the Decree 170/2011 of 12 July, which determines the central and peripheral structures, as well as the offices of the ministries of the Government of the Canary Islands (BOC n º 138 of July 14), and for minor is competent and qualified for solving the Ilma. Mrs. Director General for Planning and Tourism Promotion in accordance with Article 80.2 of Law 7 / 1995 of April 6, Management of Tourism in the Canary Islands (BOC n º 48, April 19) and Art degrees. 7.2.B). F) of Decree 240/2008 of 23 December, which approves the Organic Regulations of the Department of Tourism (BOC n º 3, 1/7/09), effective in accordance with the transitional provision Decree 170/2011 first, from July 12, which determines the central and peripheral structures, as well as the offices of the ministries of the Canary Islands (BOC n º 138 of July 14).

[fifi]

The meeting which was due to be held on 15th December was postponed. It seems like they backed down because of local lawyers trying to get them to change the law.

Update 15 December: There is a public meeting planned for the second half of January in the south of Tenerife. Attending will be the Government tourism department, the chief of the inspection team, and other senior officials of the department.

More information about that here http://www.janetanscombe.com/news/illegal-holiday-let-inspections-and-fines-situation-continued.html

[Florence]

If there is sufficient pressure to bear - this law will go.  It is nonsense.

[fifi]

The fines are ridiculously high Florence. I wonder what the fines are like in the Balearics? I must try and find out.I bet they are nothing as high as the ones in the Canaries. Fair play to the people in Tenerife for trying to do something about it. I will keep an eye on it and see what happens.

[sharky]

More of the same concerns here - www.lanzaroteinformation.com/content/illegal-property-letting-canary-islands, however a little nugget for those who are having concerns right now:

"Any concerned property owners can search the BOC to see if they have been registered, go to the website www.gobcan.es/boc, click the Búsqueda avanzada (www.gobcan.es/boc/busqueda.html) option and enter your NIE number into the "buscar en texto" section and press "buscar" – hopefully a link to your name won't appear."

This may give someone a more peaceful Xmas.

[SurfJames]

Is there any chance of passing on these fines to the estate agent? If they advertise the properties demonstrating excellent rental potential etc, then surely they are involved in miss-selling.

Also, how many spanish get these fines? It would be interesting to see a break-down of nationality and fines being imposed.

[appy ammer]

james m8 where yer been, the estate agents have all long gone