First illegal lettings appeals reach Court

First illegal lettings appeals reach Court

Update 28 May: First of all apologies: we are not going to post the video recorded during the meeting at Court the other day. Alotca lawyers have had serious misgivings about making it public, not least because it is in Spanish and will not only be incomprehensible to those who do not understand the language, but because it will also be impossible to contain any misinterpretations, confusions or misunderstandings that might arise. The main reason, however, is that its further dissemination and discussion cannot be contained, and given that sensitive negotiations are now on the point of starting, it is essential not to jeopardise the appellants’ cases. Widespread comment on the video, perhaps with it even being uploaded to youtube, would be unhelpful to say the least, and might even serve to create an environment in which Turismo becomes antagonised or defensive.

This is the thinking behind the decision not to release the video, but José Escobedo will instead write a legally detailed piece for me to post with a screenshot of the video explaining the current situation and the discussion in the meeting that led to the negotiations now about to take place. He has also asked me to stress that while Alotca has the majority of the cases, and in our opinion the best strategy and defence (we can’t go into detail for what I hope are obvious reasons), he and Santiago are not miracle workers. They will, however, put all their expertise and commitment into the negotiations and hope, with good reason, for a satisfactory outcome.

I’ve been asked to stress, once again, that while all identical cases, and even those that can be argued to be identical, will be put into the class action, there are other types of cases being heard in other Courts. The situation is not a simple, black and white issue, so there is much room for confusion to be created when people have partial or unvalidated information.

On a matter that is giving rise to lots of questions, I can confirm that anyone who is at the stage of appeal to the Courts with a non-Alotca lawyer can request to join the class action: they just need to instruct their lawyer to contact Tenerife Litigation in La Caleta, and the lawyers can decide between them whether the case is of a type that can be added to the action. Anyone at that stage will already have had their appeal presented to Court and so could not switch lawyers even if they wanted to. Anyone who is still at the stage of first phase appeal to the Government can, however, if they so wish, switch to Altoca.

Please note that I say this in response to queries that I have received, and José Escobedo and Santiago Saenz want to make it crystal clear that this does not represent any sort of touting for business. Finally, anyone who is already with either Alotca lawyer need do nothing unless they wish to opt out of the class action: if their case is such that it can be added to the action, it will be added automatically unless they instruct to the contrary; if their case is different, and such that it is not appropriate to the class action, it will be defended in the Court according to the instruction already agreed.

Thank you to everyone for bearing with us: it is a phenomenally busy, and complicated, time. We do hope you understand the reasoning behind the decision not to upload the video, and will have a legally-detailed and qualified piece here for you as soon as José has the time to write it up.

Update 24 May: I’ve been asked to point out that the offer of a class action with a €5,000 fine for signing a document is only available  to those cases which form the majority of Alotca appeals – i.e. those whose fines started at €18,000 and which were reduced on first appeal to the government to €13,800. All cases in the class action must be identical, and clearly, not all are, with some owners being fined on the basis of random inspections and/or private adverts, others for running multiple properties as a business, and yet others who have been denounced by communities or neighbours etc.

As a general rule, anyone who has ended up with a confirmed fine of above €13,800 will have been fined for a different type of infraction – very generally these will be for offences against the “principio de unidad de explotación e intermediación turística”, i.e. sole agent system, or multiple apartment letting. All Alotca clients who fall into the class action category will now have received, or will shortly receive, an invitation to join the class action. As of today, I can confirm the outcome one of these (different) types of cases where the appeal (not via Alotca) was rejected yesterday by the Court and the Government’s fine upheld … and with no possibility of appeal granted.

Update 23 May: Just a quick update about the video. I will have my copy on Monday and once I have that, I will be able to upload it here as soon as I have technical advice on doing so, unless it’s obvious to my technophobic mind …

Update 21 May: There is a recording HERE of my interview with Atlantis FM this morning on this subject. Thank you to Jon Maxfield for the airtime to get the message out there as widely as possible.

Original post 20 May:  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.

 

43 Comments

  1. Major news, Janet. Can you get this message out via the local English language newspapers considering how much space they gave to other (misguided?) views on the issue.

  2. Hello Janet
    Many thanks for this important update. I wondered if the 5000 euro fines are for each owner regardless of how many apartments they were illegally renting or is it for each apartment? and will these 5000 euro fines also apply to the independent agents who were handling numerous other illegal rental apartments?

  3. Author

    I’m trying Doreen. I think this is going quite widespread, in papers, radio, and other info and advice sites. Yes, it’s very big news.
    .
    Ken, it is per case. If an owner has two apartments and therefore two cases, it will be €10,000. This is concerning individuals renting apartments, as I said above. Agents are not involved in the class action for individuals’ fines.

  4. Hi Janet,

    Again many thanks for the information,we were going to see Jose today about our court case but we are now thinking of cancelling it my only dissapointment is the size of the fine I still think €5000 is very excessive for an honest mistake and the missleading way in which many of the properties were sold, perhaps you could mention this to Jose and the Judge as mitagating reasons to reduce the fine even more

  5. Author

    The fine amount is now subject to negotiation between Saenz&Escobedo and Turismo. The judge has already given his formal opinion that €5K is reasonable, so it will be there or thereabouts … I doubt it will be more!

  6. Many thanks for this and all the previous news you have collated Janet. I’m glad that some sense is begining to prevail and that ‘shortly’ we’ll be able to draw a line under the whole business.

    Will those owners who belately participate in the class action be charged the same by the lawyers as those who originally signed up earlier I wonder?

    I can’t help but feel the same end result could have been achieved by a strongly worded letter and significant fines for repeat offenders.

  7. I know that the subject of “Illegal Letting” has been thoroughly discussed but I was wondering whether the Alotca Lawyers are going to take this action through to the EU Courts of Justice – to me the Canarian Governments decision on letting must surely breach Human Rights.

  8. Author

    Well we will now be negotiating an out of Court settlement, but of course anyone has the right to reject this and insist on a full hearing – though this would be in front of the very judge who has said an out of Court settlement is preferred! And of course there would be court costs on top of any eventual fine, which would itself be unlikely to be less than 5,000 given this is the judge’s own expressed opinion of the right level for it.
    .
    Anyone who wants to fund a legal case, though, and then on to Europe, is entitled to do so, and the lawyers will of course take their case! It’s not for the lawyers to do, however … there has to be a case to take to Europe, and that case will be of an individual who will have to be prepared to pay for the legal process.
    .
    It doesn’t breach human rights legislation, though, for what it’s worth. EU legislation gives no-one the right to break valid laws, nor the right to letting a property. Human rights are concerned with more fundamental things than that!

  9. Janet, would it be possible to request consideration, that in accepting the reduced 5000E level, that the fines be suspended (for a first offence) whilst accepting that any subsequent further violations would attract the full 30,000E level for a grave offence ???

  10. Author

    Not a chance, Pete … the judge feels it is “reasonable” that people are “punished” by a €5,000 fine. We hope we can get it down a bit but there’s no chance Turismo will negotiate to zero. And because it is to be negotiated, the judge is leaving it to the lawyers to agree, so won’t impose a figure for an out of Court settlement, let alone a suspension. Even if that were possible, however, he wouldn’t agree to a suspension given that he thinks a pecuniary punishment is appropriate.

  11. thanks Janet

    So in effect it is what an English court would deem a “mediation” to be settled out of court between the 2 parties involved. Wil this set a precedent for any future fines levied??

    I would have liked to have seen some consideration for a suspension of the first fines but I take note of what you say.

  12. sorry also meant to ask would this have any effect on personal private use of residential property.

  13. Author

    Yes, it’s an out of court settlement negotiated between the two parties involved, i.e. Turismo and the class action of those who’ve been fined and who are appealing.
    .
    Although Spanish law isn’t precedential, I am told that these settlements will form a precedent for future cases. What form that will take is uncertain – perhaps future fines will be issed at whatever figure is finally reached, or maybe the nature of the “offence” will change to warrant a different level of fine. Only time will tell in that respect.
    .
    to your later point … this has nothing to do with anything other than the fines imposed for illegal letting. It has no bearing on anything else, let alone private personal use.

  14. We had an advert for more than one property but have only been fined for one. Can we still be fined for the other property?

  15. Author

    Yes, I’m afraid so.

  16. Is there no time limit or do we have this shadow hanging over us for ever? We no longer rent the property at all and have removed all advertising some time ago.

  17. Janet, you say “This is concerning individuals renting apartments”. Are there any independent villa owners in the mix?

  18. Author

    David – I’m afraid there is no time limit, but if you have removed all advertising you would have a very strong defence, or at least very strong mitigation.
    .
    Sorry, IP, I should have said properties. I don’t honestly know the breakdown, but I can’t swear it’s just apartments.

  19. Dear Janet,

    I know you have said about the legal situation with human rights & the EU but I feel what the Govt have done in my case is questonable although our Escatura states the the property is owned by me and my wife, it was my wife that purchased the property from proceeds left to her when her mother died, also the add on the Internet which the judge has said is unreliable was placed by my wife paid by her and was in her name only, but it is myself that has been fined.

    This is surely unjust as the people who issued the fine have no idea what our relationship is or even if I am still alive, this is a pure chauvanistic act.

  20. Author

    Sorry, M, I know your situation is infuriating, but if you are on the escritura, you are an owner. If there are two owners, the fine can be in either name …


  21. Are you aware of any serious attempts to try to estimate how much this will further reduce Spanish property values, erode Spanish banks even more, reduce Spanish economy, punish the Spanish people and bring even more Spanish people to unemplopyment?

  22. Author

    No, I’m not, most sources that discuss this see economic and employment problems in the Canaries in a wider context than that of illegal letting, i.e. that of the national Spanish and European economic crisis. The only real discussions I’ve been aware of have focused more on how much the Canaries lose from illegal letting – rather than how much they will lose from it being stamped out. As a result, they instead see gains to be made for these islands by putting a stop to it.
    .
    By “loses from illegal letting” I’m referring to their discussion of private “airport runs” rather than legal taxis, friends who act as keyholders and cleaners and who are paid in cash and so costing jobs for Canarian staff and income tax for the state, that sort of thing. It’s important to realize that the Canarians, at least in Government if not more widely in society, see illegal letting as an problem that needs to be eradicated. It is really largely foreign property owners who see the matter in the terms you describe.

  23. Dear Janet,

    I have to disagree with you, the locals I have spoken to do not understand why holidaymakers are not allowed to come & rent apts. Our own complex which I have explained before was built on Tourisit land conforms to all the Tourist requirements but can not get a licence is now suffering.

    This time last year the complex was almost full but at this moment there are only 10 apts occupied & next week a main holiday week there is only about the same number. We have lost about 10 members of staff from a manager to cleaners, these are local people who have now joined the very large & increasing ranks of the UNEMPLOYED thanks to the Govt actions (but of course they still have their overpaid jobs like all POLITICIANS)

  24. Author

    That’s locals in a holiday area M, I’m talking about the majority represented in the press, and they don’t live in the south, or if they do, it’s in the hills or main towns away from the tourist areas. Clearly those locals who live in the main holiday zones will have a different perspective … but I’m afraid we would be making a great mistake if we took their views as representative of the majority.
    .
    Having said that, the majority hardly hold a positive view of their governing politicians, but their concerns are more immediate, and at the forefront of their mind are the economy, political corruption, and the banks. Despite their views of the politicians, if they think about tourism at all, it is that the foreigners who are taking cash and employing foreigners for cash, are making a bad situation worse and depriving legal tourism of its chance to reach its full potential.
    .
    It’s as well that we recognize what the majority views are …

  25. Janet,

    I do not see the maths if it is in the North or the South/West where Tourism is very few of our now unemployed staff actually live here, they are in the villages away from the Tourist property areas because it is expensive to purchase even now.

    Also dont forget if it was not for the foreign investors these Islands would still be covered in bannana trees and the locals would not have had the standard of living they are used too,which they are now losing because of these actions, and try and tell them they are not part of the majority

  26. Author

    M, we were talking about how the majority of Canarians see it …

  27. I think the great shame in all this is that if sole agents were regulated so that owners received a fair amount of rental income for their investment (and I know there are some good sole agents) and owners were able to use their apartment when they wished, with their own fixtures and fittings (provided they complied with touristic requirements) the situation would be palatable.
    There are some large sole agencies that literally take control of the apartment and you are literally left with nothing more than a timeshare apartment – not good news for anyone contemplating purchasing in Tenerife!

  28. Author

    Agreed, Phillip, as so often I agree with you.

  29. Janet,

    Is that the “press” figures or the actual people that are losing their jobs. try taking to our cleaners!!!

  30. Author

    officiall statistics from body in Madrid … but everyone knows they only represent part of the picture.
    .
    Anyway, please now, let’s keep this for any questions or comments about the appeals.

  31. Janet, should we have received any notification yet about the need to sign something for the class action? We were fined 18000 which was then reduced to 13800. Do you have roughly any idea when we will be contacted by the lawyers, in our case Señor Escobedo?

  32. Author

    Hi Catherine, imminently I would say. He said the other day that everyone was to be contacted … this will be in process, I imagine. I’ll be speaking to him again shortly so will try to confirm.

  33. Thank you again Janet for updating us on the current situation. Your page is so helpful and you deserve a medal for making life easier for those of us who don’t know where to start when it comes to legal matters. Is there any way we can repay you? Perhaps a donation, in your name to a charity or animal refuge or something…..

  34. With regard to not releasing the Court Video. In my opinion this is without doubt the right thing to do because as you rightly say Janet the negotiations will be complex and delicate. It is far better at this stage to rely on the comprehensive and accurate updates that you give on your website and I am sure that everyone will appreciate and understand that this is the best way forward.

  35. Excellent work as ever, Janet. I did some research a while back which shows the positive impact to the Lanzarote economy as a whole of “illegal” tourism for the year 2011 and I’m sure that the same principles apply to Tenerife. I would expect that, due to economies of scale, employment would go DOWN if all private holiday lets were abolished.

  36. Hiya Janet

    Asked for an update from Jose on Friday and got this :

    Your claim is being dealt by Court number 3 – file num *******

    We have not received a date for the trial.

    The judge of Court number 3 is the only judge (there are 4 court houses dealing with this matter) who do not accept to hold on escrow the funds, ****************

    If we are successful with the claim we can re-claim the fine from the Government.

    We shall keep you posted

    Ive emailed again but wondered if you could help?

    This seems to me that my case will be heard in court??, which seems to conlict you above post re class action of pre court discussions? Also it mentions 4 court rooms, i thought just 1 judge was looking at these cases?

    sorry if i seem confused.

  37. Author

    Hi kidder, he’s up to his ears and over right now and I’m waiting on a reply myself for something unrelated.
    .
    OK, it is Court 2 whose judge has asked for the negotiated settlement, and it is Court 2 which has almost all of the €13,800 fines. When we’ve spoken before I assumed yours was in that batch, as most in the category would be, but if yours has been allocated to Court 3 it is a different matter, unfortunately. There are two other Courts in Santa Cruz as well, though I think Court 1 is hardly involved in these hearings.
    .
    Court 3’s judge will hear his own cases – he doesn’t have the numbers that Court 2 has and so it’s much more practical for him to do so – and has not suggested negotiation, so yes, your case will indeed end up going to trial. Moreover, unlike Court 2, this judge won’t allow the escrow option, so the fine must be paid up front, I’m afraid.

  38. Thanks Janet.

    Do you see the same type of fine in this case? around the 5k mark?

  39. Author

    No, I doubt it, I’m afraid. €5,000 was the sum thought reasonable by Court 2’s judge. Other judges will have their own ideas, and one case recently was confirmed for the fine as it ended up after the end of the appeal to the Government (whatever that was … it wasn’t a 13,800 case, I think it was around 20,000).

  40. Hi Can you help me decide if its worth continuing with my plans after finding yr blog today, I,ve been slowly changing my 3 bed 2 bathroom bungalow on Palo Blanco San Eugenio into wheelchair friendly by making a roll-in shower and fitting extra wide doors etc. and just start to advertise it with a few agents for disabled holidays and have already received a booking for the whole of January but as I can see from these conversations it looks like I would be breaking these laws of holiday letting in a residential complex and could receive a fine, out of the 6 bungalows here 3 of them are already rented out for holidays so what advice could you give me or is their a way around this problem as I,ve already spent my savings on this project looking forward to yr help thanks Jane

  41. Author

    I’m afraid there is no way around this. With the law as it stands, and as tightened in the updated legislation passed last year, residential properties may not be let out commercially to holidaymakers at all. The best I can suggest is that you speak to a lawyer who knows this area of law to see if there is any leeway for some sort of medical services to be provided; that might bring its own issues in terms of licences and standards, but it’s all I can think of as even a remote possibility. The fact is that if you advertise a residential property for holidays you risk a fine of €18,000.

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