Many of those buying a home in Spain do so with the intention of using the property as a holiday let. This is a sensible approach and, if effectively managed, it can ensure that the property “pays for itself”. However, the Spanish government recently devolved control of rental properties to local government, meaning that the rules have changed a great deal and are subject to still further change. This means that it is important to be aware of the current rules in force before you take the first steps into holiday lettings.
Since when have there been rules governing holiday rentals in Spain?
The Spanish Urban Rental Act 29/1994 regulates the rental of all properties, both those for use by the tenant as a primary residence, and those that are let by the owner as holiday lets.
The Spanish government, under pressure from those representing hotels throughout Spain, proposed a new law relating only to properties rented as holiday lets. This law was approved by the Spanish parliament on 23 May 2013 and is has been in force in Spain since July 2013. According to the rules the regulation of holiday lets is the responsibility of the region in which the property is situated. In some regions, such as Catalonia, the Balearic Islands and the Canary Islands, local laws have already been passed regulating holiday lets and are being enforced rigourously.
Do the rules apply to the whole of Spain?
The following areas have introduced specific laws regulating the rental of holiday let houses and apartments including Asturias, the Balearic Islands, the Canary Islands, Catalonia, the Basque Country, and Valencia. However, in due course the new rules will apply to all parts of Spain.
Can any type of property comply with the rules?
This depends upon the area in which your property is located. In Catalonia and the Canary Islands, for example, all types of property can comply, whereas in certain regions individual apartments cannot comply with the rules and so cannot be let on a short-term holiday let basis.
What do you have to do to your property so that it complies with the rules?
Simply stated, wherever the property is situated it must be furnished to be occupied immediately and should be sufficiently equipped for the refrigeration, preparation and consumption of food and drink.
Depending upon the location of your property, you may be required to apply to the local government for a rental licence, for which you may need to submit an architect’s report specifying the number of bedrooms and bathrooms at the property, and the size of each room. You may also need to display at the property claim forms that can be used by tenants to report their dissatisfaction with the property, if necessary. These claim forms, if completed by tenants, will be submitted to a local government office. In addition, you may have to submit to local government documentation specifying the facilities available at the property.
From 1 June 2013 it is essential for each property to benefit from an Energy Performance Certificate (EPC) in order to rent a property, or indeed to sell it. The application for an EPC must be accompanied by a report prepared by a suitably qualified professional who will have surveyed the energy rating of the property.
Will you need to provide information to the Spanish authorities on an ongoing basis?
Depending upon the location of your property, you may need to renew the registration of your property annually, submit all completed complaint forms to the local government periodically, and/or register all of your tenants with the local police within 24 hours of their arrival.
What are the sanctions for failing to comply with the rules?
Depending upon the location of your property, under the new rules you may be subject to fines ranging from 3,000 Euros to 400,000 Euros.
In some regions, the restrictions are such that it will become unlawful to continue renting as holiday lets many of the properties currently on the holiday lettings market.
It may seem counterintuitive to impose strict rules on property owners who very often are only able to cover the expense of running their second homes by renting them out to holidaymakers throughout the year. That said, the new rules appear to seek to maintain a relatively high level of accommodation and service in private rental properties rented on a holiday let basis, a service level that Spanish hoteliers are already obliged to comply with. The effectiveness of the new regime throughout Spain will very much depend on the extent to which compliance with the new rules is policed.
What should I do if I am planning to purchase a property in Spain to use as a holiday let?
It is vital that you are certain before committing to purchase the property that you will be able to use the property as you intend. If you do intend to use a property in Spain as a holiday let you should make certain that your legal adviser is aware of your intentions and ask them to look into the rules in regards to rentals in the area in which you intend to purchase.
You should also ensure that you protect your interests by asking those who rent your property to sign a contract which has been correctly drafted in accordance with Spanish law.
If you have any questions or if you would like to arrange for a rental contract to be prepared please contact us for a free initial consultation. You can contact us by email at firstname.lastname@example.org, by telephone on 020 3478 1420 or by completing our contact form.