Legal situation for “illegal letting” fines at end of first appeal to Government procedure

Legal situation for “illegal letting” fines at end of first appeal to Government procedure

Under Spanish law, the Canarian Government’s fine on those it deems to have been letting illegally must be processed within six months or it “expires”. Once expired, Turismo issues a certificate (of “caducidad”). If one is not received it can be applied for. The process includes three stages: an appeal against the initial notification of the fine, an appeal against the rejection of the appeal, and a final appeal – a Recurso de Alzada. Once a Recurso de Alzada has been made, however, the clock changes, and another administrative legal rule applies, namely that if no reply has been given to this final appeal within three months, the appeal is considered rejected.

Alotca lawyers of those who have been fined and reached the six months limit – and who have not received a certificate of caducidad – have already applied to Turismo for this certificate. In the majority of appeals which have expired and where a certificate has not been issued, the request for the certificate has not been acknowledged. Many of these fines, however, are in the Recurso de Alzada period, and so the “three months for reply” rule applies.

Obviously fines are issued on different dates, and so the Recursos de Alzada were made varying times ago, but the lawyers are writing to clients whose three month period is almost at an end. They would be negligent if they did not advise their clients that there was a clear danger that their first appeal (the three-stage appeal to the Government) is about to be rejected and that appeal to the Courts must follow – or Turismo will consider the rejection to be accepted, and enforce the fines and lodge the charge against the properties of those who have not paid.

The appeal to the Courts will use several legal arguments, one of which is that the appeal was beyond its six month limit, though Turismo has the option of using the “three-month reply to Recurso de Alzada”  defence. Other legal arguments have already been drawn up but it is clearly not sensible to publicize those arguments which the lawyers are going to use in Court.

The fee of €925 that is being quoted for this second appeal to the Courts covers not only the full appeal, which is expected to take up to a year, but also barrister fees. Unfortunately, those in this position must confirm their decision now as the lawyers need time to organize the cases for defence.

In a nutshell: if you are beyond the six month period but have not received a certificate of caducidad yet, the lawyers can not guarantee that Turismo will issue one. Turismo can instead choose silence, and the law allows that following a Recurso de Alzada, if no reply is received in three months the fine is confirmed. If you do not instruct your lawyers before the three months is up you risk the fine of just under €14,000 being confirmed and lodged as a charge on your property. Please be reassured that anyone in this situation will be receiving a letter from the lawyers. You do not have to do anything proactively other than instruct them to proceed, if that is what you choose, when they contact you.


  1. Janet,
    I am in the same situation as people posting on Bens site If I pay the 925euro is this the final cost the lawyers will charge to get this 13800euro fine removed and obtain the certificate ( of caducidad ) from Turismo

  2. Author

    They aren’t after the certificate. The certificate isn’t coming – this, together with the fact that they haven’t had a reply to the Recurso de Alzada, is why they know the first appeal to Government has been rejected.

    What they are now talking about is the second appeal to the Courts, which we always suspected would have to be made, and which they always said would involve a further fee.

    If anyone doesn’t appeal to the Courts against their fine it will be confirmed, and once confirmed it will be registered as a charge against their property.

    Those who appeal to the Courts have no guarantee. How can they have? The lawyers will be seeking to have the fines overturned, but realistically think this is unlikely. They will therefore be going to have the fines reduced to the minimum of 1,500 or so. The Courts are independent. How can anyone say what will happen?

    As I tried to explain above, they are appealing against the fine, not going for the certificate. This is a full one-year or so appeal against the fine, and one defence will be that the process was beyond the six months – even though Turismo never issued the certificate of expiry.

  3. I had real difficulty understanding it all, and I think I’m a fairly bright person. It’s thanks to Janet’s explanations I think I finally “get it”. Thanks Janet.

    It’s all so weighted in the Government’s favour. If you don’t get a response within the 6 months, then you should win, but if they don’t bother replying, then you lose!

  4. Author

    This is a reply I sent to someone earlier who was confused and this seems to have got the explanation through … hope it helps others.

    your first appeal was an appeal to the government to overrule the fine. That had to be completed within six months. One administrative rule says that if they don’t do this they must certify it as expired (the certificate of caducidad, or six months certificate). The first appeal, though, is in three parts, and once the third part goes in, the clock changes – the six months rule no longer applies, or rather it is overriden by a new rule, namely that you must be told within three months if they accept the appeal.

    If you don’t hear within three months of the last stage of the appeal to the Government it means they’ve rejected it. This is crazy because it means they can just do nothing and the fine stands, but that’s the rule. So, the new three month rule overrides the six month rule and means they the Government has three months to grant your appeal – or it is considered rejected.

    So, in a nutshell, the six months rule is a “positive” one – if they don’t finish within six months you win. The problem is that this is overriden by the three months rule, which is a “negative” one – if you don’t hear within three months you lose.

    This doesn’t stop José applying for the six month certificate, though, but that’s all part of the first appeal costs. The relevant thing is that the apparent refusal to grant the certificate (it hasn’t been forthcoming, certainly), together with the lack of reply to the third part of the appeal, means that the appeal is rejected and the fine is confirmed.

    So, since the first appeal has failed, as we pretty much expected, we now have to make a second appeal to the Courts. This is a full legal appeal to the Courts – nothing to do with the certificate as such, though part of the appeal to the Courts will involve the argument that they ran out of time. They will almost certainly deny this, saying that the six months rule stopped once the three month rule started and so they weren’t required to issue the certificate of expiry – and, as I say, if they don’t reply to the third stage within three months it means they’ve rejected your appeal.

    So, the appeal to the Courts involves a barrister arguing the whole case from scratch, but to the Courts rather than the Government. This process is likely to take up to a year, and the 925 fee is around 700 or so for the lawyers and 200 or so for the barrister which is required under administrative procedural law here for cases that go to Court, so not an optional extra.

  5. Under a different headline on this site, three days ago, Francesco Martini, found something interesting on the BOC (Canarian Official Bulletin). Today -22nd June- there is also something even more interesting to examine. You can read there a fine issued by Tourismo to a councilor of Yaiza, in Lanzarote, for letting his impressive villa. As he is a politician, his fine was reduced to €6,010, while most fines are reduced from €18,000 to €15,000 or €13,800 if the offender is lucky.

  6. Thanks Janet,

    Any Idea where I can get hold of one of these coins that the govt has.

    Keep up the good work!

  7. Author

    Yes, it feels like “heads I win, tails you lose”!

    Bear in mind, though, that the appeal to the Government was always a long shot. We always thought we’d end up having to appeal to the Courts. And that’s where we’re at now … or where many are fast approaching.

    The Courts are independent here, and often demonstrate principles in their judgements that seem to support the underdog. They don’t seem generally to like “power”, whether political, financial, corporate, whatever. The Courts are as good a chance as anyone in this situation is likely to get.

    To put a slight damper on this, the law is still the law, and the law is very clear on “touristic lettings”. As such, the Courts might have their hands tied in terms of throwing the fines out completely, but we hope that at least we can get them reduced to the minimum for the “serious” category in which they fall, ie €1,500.

    The bottom line, though, regardless of outcome, and regardless of whether the issue goes all the way to Europe, is that the current law prohibits openly offering non-touristic properties to the public for commercial (touristic) purposes, and prohibits touristic properties to be openly offered to the public other than through the onsite agent. The new proposed legislation that is currently out in pre-draft form is not going to be any looser; it is likely, indeed, to be even tougher in this particular respect.

    The only sensible advice, and the strong advice from Alotca lawyers, is (sadly) to stop advertising now for your own safety, and make sure all taxes are paid up to date.

    We can fight, but we can’t do it with our hands tied behind our backs. We have to be squeaky clean to have a hope of getting anywhere.

  8. So does this mean that there is little hope of the sole agency system being reformed? I would welcome inspections and a requirement to improve standards but if the sole agency system is allowed to continue as it is, then the abuse of many owners will continue and some touristic apartments will be virually unsaleable. It is a pity that there are some good sole agents who are fair and reasonable but the majority seem to have used this ‘crackdown’ to impose their will even further.
    If the sole agency is to remain then I hope there is at least regulation on them to allow owners control of their own apartments!

  9. Author

    Yes, the sole agency system is to be reformed, but we don’t know how. What we know is that there is to be some sort of “shares” system, and a new concept of a “condominium”, but how this will all work out in practice is unclear at the moment.

  10. Philip, of course sole agency can be challenged and thrown out, but it will take time and this campaign is in its early days. As it stands the canary government are standing by their daft system, even though it was largely ignored for 16 years and many renters managed fine renting out on their own. This would be expected at this stage, remember their stance is all about hotel protectionism. What other reason would there be to require sole agency? Its like ask yourself what logical reasons does the canary government have to make it law only to allow renting through a sole agent?
    Given that the law exists just to provide hotels with protection against self catering accomodation then this situation could only come about in the first instance because the hotel lobby in the canaries has power in canary government. Its no good at this early stage being upset and disappointed that the canary government has not opted for a u turn and had a more reasonable look at the whole issue. Given the nature of them that was never going to happen.
    Alotca can win on this issue by taking things to europe. The simple matter of demanding a sole monoploy agent as compares with freedom for individual renting is not really that complicated to argue for. Its a basic normal freedom in most democratic countries. The canary government will have to argue why they insist on their own peculiar daft monopoly system.

  11. Andrew said … The simple matter of demanding a sole monoploy agent as compares with freedom for individual renting is not really that complicated to argue for. Its a basic normal freedom in most democratic countries. The canary government will have to argue why they insist on their own peculiar daft monopoly system…. but, this has already been argued and the Canarian Government won the challenge by claiming, I believe, that it was for better consumer protection, so the Commission did not pursue it any further. And I guess here precedent will count for something, unfortunately.

  12. Janet quick question on this…

    Will the lawyers let us know at each stage of a 3 stage of the initial appeal do you know? I’m am 3 months in and heard nothing as yet?

  13. Author

    I don’t know, but don’t think so, kidder. I think they just get on with it. You can assume that they’ve appealed the initial notification, then got a few thousand off, then appealed that and git the 15 page letter I’ve referred to previously, and then sent in the Recurso de Alzada. This is the stage that the clock changes. Once the Alzada is submitted the government doesn’t need to do anything, and if 3 months passes without hearing anything, the appeal has been rejected and the fine confirmed.

    I don’t know who you’re using, of course, and I don’t know what José and Santiago do in terms of informing clients as a matter of course, so I’m completely in the dark as to your own particulars.

  14. Always suprises me when its pointed out that the canary government has won in europe before over the letting laws as Doreen is posting. But today I fel the situation is very diferent, the case years back was between large agents on a complex. Today with internet advertising its a case of many thousands of private owners who have been renting as individuals sucessfully for years. The legal requirement for monopoly sole agency should be capable of being challenged today in 2012, I cannot see how sole agents are good for consumer protection any more than individual renters.

  15. Philip,
    When the sole agency is slightly reformed after the new law is validated in a few months’ time, agents will become even stronger than today and for sure private apartments in tourist complexes will be nearly unsalable. This new law will strengthen the traditional abuse committed by sole agents as those small owners with such type of tourist property will not be able not only to rent illegally for weeks anymore, but also to rent long term either. At the present early stage of the law draft, we can clearly see that the Government’s proposal at this particular respect is to enforce the tourist nature of the property for which it was built and the only way for individual owners to do so is through the licensed company in each tourist complex. Sole agency has been responsible for a number of frequent abusive methods to run the business with no disturbance. Examples of this are high community fees, threatening letters, unjustified bills, exploitation‘s expenses mixed up in community budgets, receptionists frightening off possible apartment buyers by telling them that the only legal thing to do with the property is to exploit it through the sole authorized agent… and in extreme cases other sort of worse pressure I prefer not to mention. I know much about this although I have never been a landlord (my offence consists of occupying my property for a few months a year) and my lawyer says something that I had read on this website before: Given that things are like this, nowadays it is far better to own an apartment in a residential complex rather than in a touristic one. At least you will not feel pressed to take part in a ruinous business and you will be able to enjoy your property, let it long term or sell it.
    The Government thinks there has been too much freedom by allowing everybody to let illegally for 16 years and it is time to finish with such irregular activity that causes a harmful effect on the tourist image, make legal companies difficult to survive due to thousands of illegal competitors and stimulates black economy. That’s not my opinion, but the Government’s thoughts. In the past, there were fewer independent apartments irregularly commercialized, but today internet helps to market hundreds of new apartments every year.
    Canarian Tourist Law has suffered a few modifications in the last 16 years of existence. Furthermore, in 2009 another complementary law was approved by Parliament: It was named “Ley de Medidas Urgentes”. This law includes an article to prevail the tourist over the residential usage in complexes in which mixed usage (residential & tourist) had previously been authorized by local urban plans. This 3 year old law also increased the amount of money paid for offences. For example, before 2009, the violation of the “principle of exploitation unity” was considered very serious and the fine was up to the top of €30,000. After 2009 this type of offence is fined between €30,000 and €300,000. In addition, the 2009 law states that complexes where there have been tourist activity by sole agency must not be transformed into residential. Now that additional protection will be given to tourist areas through a new law expected to be approved in autumn, it will be even harder to enjoy the freedom of deciding what to do with your property. Every time the Government introduces a new law is just to make it more difficult to escape from the protectionist control.
    Doreen, your prediction is correct. You’ve hit the nail on the head!

  16. We never bought our place with the intention of renting it out, just so happens the previous owners had a load of bookings in place that we had to honour so it went from there. We would rather have the place empty all year round than let some plastic gangster exploitation firm try and screw us over! Feel sorry for any owners who NEED to rent out to cover a mortgage.

    Tenerife will never recover from this as the island has nothing more to offer than holidays in the sun. It’s an island on the bones of its a*se as it is & I hope the Canarian Governement is happy when the streets are empty, bars have closed down and all the holidaymakers are enjoying themselves elsewhere! Pathetic.

  17. Good post Craig and straight to the point. I would rather let our apartment stay empty when we are not there rather than be exploited by the exploiter!!!

  18. I’d be relatively happy just allowing the genuine freinds & family who use our place to still be able to do that but I bet even that won’t be allowed. They’ll bend the “ruling” on friends & family being able to use apartments to suit themselves and say they are just regular tourists. I bet a lot of owners have loved allowing people they know have the pleasure of using their holiday homes and to take that away from them too would just be the final straw.

  19. I do not share the cynicism about any future ruling from the European Court despite the previous ruling and the more recent comment to owners in Lanzarote.
    They have made it clear that they believed the sole agency system was a way of regulating and improving tourism and that is why they were hppy to give way to the Government in the Canary Islands.
    However, it is now clear that even if this system is deemed to satisfy the above criteria, it is restrictive to the point that it is affecting the basic human rights of owners of property inasmuch as they are being told when they can use their own property, that they cannot in some circumstances refurbish to a standard that may be acceptable to Tourismo and the amounts they receive in payment are not commensurate with the actual amounts being paid to the owner.
    There is so much speculation about what will happen and I think we are all disappointed, angry and frustrated but we should not give up hope that eventually (and it could take some years) sense may prevail.
    If the draft actually brings in regulation of sole agents then that will be a step forward – it is a pity that the good sole agents are tarred with the same brush in many instances. If Tourismo have the desire to improve standards and regulate owners more then it should follow that sole agents are subject to the same ‘tests’ and made to act in a fair and responsible manner.

  20. I agree Phillip. The situation now reflects many thousands of sucessfull private renters who have over many years demonstrated that they can do the job well and keep customers happy without the sole agent system.

    Another important reference for todays legal challenge is that the canary government have attacked the internet advertisers, clearly they were unaware of the numbers involved until the rise of the internet. Their backlash is against what they have discovered on the internet rather than any problems for customers that have occured.

    Another important point to be part of todays legal challenge is the fact that Portugal has reformed its letting laws to allow individual private renting. In europe there should be harmony in law, it can not be that the canaries can have restrictions on tourists and owners if portugal allows more freedom.

  21. Author

    There is a concept of “ultra-peripheral status”, though, which applies to areas a long way away from the political centre. The Canaries are in this category, and as such have particular rights to protectionist policies – rights conferred by Europe itself.

  22. yes janet, that seems to come into it with these special laws. But surely the logic there is equally to do with the sole agent system being believedto be a good thing in terms of consumer protection. The government argument being based on the distance of the canries from europe meaning the islands need special protection for their vital tourist industry. If the sole agent system can be shown to be unecesary because the private renters are keeping customers happy and helping the canary economy then we may be able to get somewhere. The internet advertising sites have expolded since 2005 when the law was last challenged and the world does not stand still. I find the argument of the periphal location less persuasive if the situation on the ground is of happy renting tourists. Surely portugal would not have reformed its system if the result would cause harm to the economy?

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