Update 2 September: I had a meeting with José Escobedo yesterday and we discussed the issues surrounding the two questions he posed at the end of his article which I posted below. We also discussed the situation with respect to cases still in court.

With the exception of one particular batch of cases, the government has now largely accepted that its initial fines – based on internet inspection alone – are being thrown out of court based on the defences José has prepared. Away from the courts, the system here allows an application to be made direct to the government to cancel the fines, and these applications are now being accepted because the government knows it is pointless proceeding. So those who found out about their fines too late and now have a charge lodged against their property and/or bank account, or those who have a court case underway (some are still to be heard in January and February 2015), can apply now for cancellation. This would mean that the fine never existed: those in court would stop their process, and those imposed with the owners never knowing or appealing, would be lifted.

José has spent the last several weeks working on future possible defences for fines imposed on the basis of the more rigorous inspections now being carried out, involving physical on-site inspections, interviews with administrators and presidents of complexes, etc. I am now in a difficult position because to give significant detail about these potential defences would forearm the inspectorate, and that would undermine the legal work José has been doing: suffice to say that the defences are based on legal points tangentially related to the Ascav campaign for “vacational letting”.

I’ll say no more about the defences, and I hope that’ll be understood, and move on now to our discussions about that Ascav campaign. José used the analogy of “firefighting”, and of course we have the same metaphor in English, where an authority introduces a rule and then just stamps out problems arising from it when they erupt, rather than introducing cohesive rules in the first place. This is, in part, what has happened with tourism legislation in the Canaries, including the new law which came in last year and which is currently under review. Part of this review now, it is clear, involves plans to “regulate” this so-called vacational letting in accordance with agreements given to Ascav.

As I’ve said before, Ascav is primarily concerned with Canarian owners throughout the islands. These Canarian owners, however, are voters, which is one very good reason why their campaign has hit home in a way that Alotca’s never could. The government has to show its own electorate that it is at least listening, and it is now clear that it will do that by introducing regulation of some sort. The firefighting method of legislating, however, runs into a problem here because the government also has to appease Ashotel, which is fiercely opposed to any regulation: Ashotel, indeed, says that there is no need for regulation at all because commercial holiday letting is illegal under the terms of Canarian law.

Canarian law, though, is not the only law applicable in the Canaries. We are part of Spain, and as I reported HERE last year, there is new national legislation to flexibilise the rental market. This law is self-evidently not part of tourism legislation, either national or regional, but it concerns rentals. And article five has significance because it can be deconstructed to read that regional parliaments are actually required to pass “vacational letting regulation”, or at least must do so if they wish to have any control over regional tourism measures or their enforcement.

I am not going to go any further into this because José is now drafting something and we will then be working on it together – I’ll post it at that point, hopefully this will be in the near future. What I’ve just said, however, should at least explain why the government is keen to come to agreement with Ascav: not only do they have to appease voters, it seems they should have specific regulation in their legislation in any case.  Needless to say, José and I both think that due to the conflicting requirement to placate Ashotel, this regulation, when it comes – and they say it will come at the end of this year – will not be liberating. It will, though, be enough for the government to say it has listened to its voters and issued the regulation that was demanded.

Obviously until we see the proposed regulation we are guessing, but I think our guess is an educated and informed one. Meanwhile, the defences José has been working on will be valid for any fines issued on the basis of the more rigorous inspections but before the vacational letting regulation is in force. I’ll update again when José has finished his draft report and we’ve worked it up for publication.

Original post 21 August: I have an update – more a consolidation report, really – from José Escobedo of the situation now that the 2013-2014 judicial year is over and the courts are now closed for August. I will be meeting with him in a couple of weeks to discuss the questions he poses at the end, which evidently relate to how the law is interpreted in respect of advertising, and to what the result will be of the current legislative review and, I imagine, what internal changes to the law might arise with regard to “regulating vacational property”, the Ascav campaign. I will post again, obviously, after that meeting.

I am pleased to report that I have now had trials in all 4 courts in Santa Cruz. The last trial took place in July in court 3; initially this was the only judge reluctant to accept that fines issued from internet inspections were illegal. In fact  the Government presented a precedent in this court in which this judge rejected the claim of an owner who had been inspected on the internet.

I can now confirm that I have court decisions from all courts (1,2,3, and 4) confirming that these massive inspections made on internet are null and void and consequently ilegal.

As a result of this legal work and subsequent court rulings, the Government is canceling the fines to those owners who have been fined based on inspections made on the internet. Recently we have received  a substantial number of resolutions from “Presidencia” of the Canarian Government confirming that the fines are illegal and outlining the Court decisions that have already been issued in our cases ref. this matter.

May I point out, that this fine cancellation is not automatic, but has to be applied for by the owner who has been inspected on the internet, fined and probably had an embargo placed on his bank acc. or property. There are a number of people who advertised on the internet and been fined who do not even know about this, specially those who were advertising property in homeaway.com parent web pages.

It is also important to note that we have had cases where owners or estate agents have been wrongly advised and when they received the first letter, have written to the authorities admitting that they have been letting properties or have been advertising properties on web pages. In these cases there is little we can do but we have managed to reduce the fines.

Those owners who have been fined for internet advertising and have lost the opportunity to challenge the fines through the ordinary appeals, have now got a last chance to get the fine cancelled and remove the embargoes on their property and accounts …. provided that they have not already admitted responsibility.

The legal battle is now over and there still a small door open for those who have been illegally fined if they use the right and last legal resource.

Finally, the main question now is where do we go from here:

1) Can owners rent their property?
2) Is the law going to change soon?

This article has 21 Comments

  1. Hello Janet
    Thanks for the update on the illegal letting cases. I suppose the big question for owners of touristic & residential apartments “is the law going to change soon” and if so what will the authorities allow?

  2. Yep! As I’ve said, they are in the middle of a legislative review which was planned in any case, so there might be changes arising from that. There is also the promise they appear to have made to Ascav to “regulate” vacational letting by the end of the year. Coincidentally only this morning I was reading about Barcelona, where a promise to “regulate” has ended up with an extremely restrictive licensing system – so restrictive that private letting is effectively banned. I wouldn’t be surprised to see something along those lines here. We just have to wait and see, though, of course, and I’ll update as and when with whatever I have.

  3. So does this mean that any owner who was fined, who has not admitted that they have done anything wrong, infact have fought the legal case from day one with Jose Escobedo in the court but were found guilty of something they had not done are going to get their money back, and the later bill for interest will be quashed

  4. If found guilty on appeal – i.e. the appeal was rejected – then it seems to me impossible for money to be refunded. Money is refunded when appeals are successful, not when they fail. If an appeal was successful, money will be refunded. Having said that, all individual cases need to be checked with lawyers individually.

  5. Thanks again Janet for keeping us remote folk in the loop.
    The answers that you seek in a fortnight will be very interesting.
    Ed

  6. Hi Janet
    We used to have an advertisement on the internet which we removed as soon as we were advised to do so. How do we check whether or not we have received a fine? About 18 months ago we received a couple of registered letters which were returned as we were not in Tenerife to receive them, they could be nothing but I think we need to check whilst there is still time to appeal.
    Thanks

  7. Janet

    My court date is feb 15. Will that now be cancelled based on this information and fine monies returned?

    I was due in court number 3 and already paid as per court 3 stipulation

  8. I don’t have the detail on your particular case, I’m afraid, you’ll need to ask José directly. Given the developments in court 3, however, I would be very very much more optimistic one way or another than I was when we spoke earlier this year!

  9. Janet, I have been told that a large number of apartments in a complex in Palm Mar have been bought I order to use them for short term holiday rentals. Is it possible that someone knows more than we do? Some people are worried that this would have a negative impact on their own apartment and encourage more people to let out on a short term basis. My understanding is that it is the land which is designated residential or touristic……is that the case? Can that be changed? Is the review going to include the renting of residential property? Any info on this would be very welcome Janet.

  10. Hi Ann, yes, it’s the case that it is the land which has the designation, and yes, land categories can be changed, but the change is made by an Ayuntamiento and it’s not a straightforward procedure because it involves changes to the general area planning agreements. And at the moment, it is that general area planning that has landed the council in court cases that will take at least two years to resolve.
    .
    I would think that Arona has far too many concerns with previous land designations and reclassifications – and far too many court cases ongoing and judgments pending – to be concerned with changing the category of land under one complex in Palm Mar. Obviously I don’t have any specific information, but I would class this is typical Tenerife rumour, at least as far as the land designation is concerned.
    .
    As to whether a buyer is thinking of taking over a complex for holiday letting, it would be a bit of a gift to the tourism inspectorate if it were done so blatantly …

  11. Hi Janet

    I’m still looking at market, particularly with a view of buying to rent, somewhere in th Canaries.

    Do you think the deselection of Paulino Rivero(?) will have an affect on rental legislation, as it might take some time for Ashotel to get someone placed in a position of power?

  12. No, Wally, it’s the tourism minister Ricardo Fernández de la Puente Armas who’s in charge of it all, and who’s ex-Ashotel, not Paulino Rivero.

  13. Hi – I want to buy a villa on Lanzarote to use a bit myself but mainly to rent out. Am I still acting illegally? I don’t mind paying an annual licence fee but I can’t go ahead with a purchase if I may be forced to stop letting it out. Should I buy or not?

  14. Best wait until the new regulation is approved and clarified. With the law as it stands right now, you cannot rent out a residential property anywhere in the Canaries to holidaymakers.

  15. Hi John

    Now is the time to buy. The banks have been selling off repossessed villas at bargain prices over the past couple of years, but prices are now rising as economies pick up and the threat of any fines for illegal renting becomes negligible. You can be sure that on the day it becomes legal, property prices will shoot up and you´ll have missed the boat.

    There´s a risk with all property purchase. Your risk of not being able to rent out is miniscule.

  16. Property prices are not now rising – the latest figures show a continued drop for resale values. The most informed view from experts throughout the field (agents, accountants, lawyers, banks themselves) are that prices are bottoming or have now bottomed, but will take anything up to three years to start to go up – if even then. My advice is that people considering buying should not “rush to make sure of a bargain”, and should take as much care now as they ever have.

  17. Thanks Janet – looking to buy midway through 2015 or maybe in the autumn so we should hopefully have clarity by then. Presumably there will be an annual “tourist licence” fee to pay to government to grant the right to provide holiday letting accommodation…… Actually not a bad thing at least it means there will be standards and quality control for rented property!

  18. Janet whilst you are a fantastic font of knowledge when it comes to legalities and information about Tenerife and the Canaries, I just wonder how much you know about the Lanzarote property market which the OP is concerned about?

    Property prices ARE rising there. Due to the vast number of unsold new build villas on the island, prices dropped more than elsewhere and most finished new build villas were snapped up at rock bottom prices. With that supply running out and few people willing to buy unfinished villas, prices are on the up.

  19. I don’t pretend specific knowledge of anywhere other than Tenerife on this blog, but in general Canarian terms what I said was correct. If prices are rising because of specific local circumstances, that’s great, and I would hope that anyone interested in buying somewhere other than Tenerife would also seek specific local expertise, or fora, rather than rely just on my own Tenerife-based blog.
    .
    Of course, until the new regulation is approved it is unclear what the legal situation will be for people buying residential property who wish to let out to holidaymakers … and on principle, I will always oppose those who give potential buyers the hurry-up because they’ll miss a bargain otherwise …

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