Second Vivienda Vacacional ruling rejects Canarian Government’s attempt to restrict tourist lets to non-tourist areas

Second Vivienda Vacacional ruling rejects Canarian Government’s attempt to restrict tourist lets to non-tourist areas

Updated 13 June: And the second judgment from the Canarian Supreme Court, this time in response to the legal challenge brought by Ascav, is the same as the first: the prohibition on private holiday lets of residential apartments in tourist areas will not wash. The regional Government is coming up against two EU principles which, in the Canaries are in conflict, namely that the Autonomous Community has the legal right to pass its own tourism legislation, however restrictive and protectionist, and the absolute requirement for freedom of commercial enterprise and competition. The Government has already confirmed that it will appeal the first ruling last month. No doubt the same will happen with this judgment too. Rulings to further challenges are still awaited. This could take a while.

Updated 18 May: The Canarian Government has announced that it will appeal the judgment issued last month against the Vivienda Vacacional decree. The court ruled that the decree had to expand the areas in which private letting of residential properties took place to include tourist areas, and for people to be allowed to rent individual rooms. The Government said that its appeal was based on the errors it believes the court made in its legal reasoning in respect of the legislation, and reminded that the regional authority was fully empowered to pass tourism legislation as it considered appropriate for its tourism model and to guarantee the sector’s development. Four more court judgments are expected for other similar actions, but the Government is not waiting, and has pre-empted them by announcing that it will appeal.

Updated 26 April: The Government was already in the final stages of redrafting its Vivienda Vacacional decree to comply with demands from the Monopolies Commission to allow private renting of residential apartments in touristic areas provided legitimate conditions were complied with, and now there will be extra pressure to finish with the first of several imminently expected judgments from the Canarian Supreme Court.

The ruling that has been issued is in respect of the action taken by FEVITUR (Federación Española de Asociaciones de Viviendas y Apartamentos Turísticos) and the Monopolies Commission, and confirms that several aspects of the existing VV decree will have to be changed. Perhaps the most significant of these is that of the areas within which letting is permitted: the Court said that it was so illogical to require tourists to stay in areas that were not touristic that the only conceivable reason for the restriction was to favour the hotel sector.

Another aspect of the existing decree that the Court has rejected is the requirement for all private holiday rentals to be of whole properties. Again, the Court says that this is only logical in the context of the Government seeking to favour the hotel sector, and that holidaymakers who want to rent just a room but more cheaply than a hotel would offer should not be prevented from doing so. If the Government accepts this, it will open up B&B as a formal and legitimate tourism model in the Canaries, something that has always been completely banned.

It is unlikely that the following judgments expected soon in response to other actions will result in different rulings, and the Government’s response will be interesting. They have the right of appeal, but there must surely come a point when they recognize that the weight of public interest and commercial fairness is against them … and that everyone sees through their claim to be protecting Canarian tourism rather than Canarian hoteliers.

Of course, there must and will still be protections in place for tourists and residents, and the final version of the Vivienda Vacacional will have to outline very clearly what these are. I suspect that the Government will use this argument, with considerable justice, to toughen up by some degrees the criteria for registration.

Updated 5 April 2017: The Canarian Government has announced that its redraft of the Vivienda Vacacional decree will be published in the near future. Tourism minister María Teresa Lorenzo said in Parliament today that the redrafted decree would allow owners to let residential properties to holidaymakers in touristic areas but with conditions attached, most notably related to quality and security being on a par with that offered by existing tourism businesses so as not to endanger the islands’ tourism model.

The decree in its current form allows private letting to holidaymakers of residential property in non-touristic areas (see HERE for detail), but as reported below, the Government has spent the last couple of years redrafting it after the Comisión Nacional de los Mercados y la Competencia (CNMC), which we would know as the Monopolies Commission, said that it “restricted competition and created barriers to the market, thereby unjustly privileging tourism businesses and disadvantaging users”.

The minister conceded that there was no form of regulation that would satisfy all sides given the conflicts of interest involved, and said that the Government was attempting to allow “the general interest” to guide legislation. The acknowledgement comes after a question was raised in Parliament about the lack of property to rent, particularly at a reasonable price, in residential areas, which the questioner (Rosa Bella Cabrera Noda, PSOE) said was the result of forcing tourists into these areas, and thus making rental prices soar and residential availability decrease. Cabrera Noda said that the redrafted decree must now be a priority so as to allow other owners to register for a Vivienda Vacacional plaque to release the pressure on these areas.

The Government has not fixed a date for the redrafted decree to be published, but we now know two things: it is not too far away, and it will allow registration under the Vivienda Vacacional scheme for private owners in areas with a touristic designation to let their residential properties to holidaymakers, though under conditions which will only become clear when that decree is published. Until then, existing rules apply. Naturally I will post the details as soon as they are available.

Updated 23 September 2015: As expected, and now confirmed, the Canarian Parliament has approved the motion for the regional Government to paralyse the application of its Vivienda Vacacional decree, and to redraft it. It will now work on a new text that seeks to incorporate both criticisms from the CNMC as well as resistance to looser legislation from Ashotel. In the meantime, VV registrations continue under the terms of the decree as current, though with no inspections nor fines for any violations.

The resolution the Government will have to find in its redraft must satisfythe hoteliers, lobbying groups like Ascav, owners who want to let their residential properties to holidaymakers, and residents who oppose this fiercely. I remember a philosophy colleague once talking about squaring the circle. I’m not sure I ever understood the concept … until now.

Updated 22 September: The debate in Parliament is to start today, and expected to last at least throughout tomorrow. Already the hoteliers are putting on pressure saying that any softening of the decree will undermine not only the decree but also the main legislation because it would essentially allow for a free-for-all, as well as endangering employment in the only legitimate tourism sector that creates jobs in the hundreds of thousands. It will be interesting to see how the Canarian Government manages to accomodate everyone in a situation where trying to please all sides has resulted in quite the opposite!

Original post 18 September 2015: The Comisión Nacional de los Mercados y la Competencia (CNMC), which we would know as the Monopolies Commission, has called for the Canarian Government to modify its Vivienda Vacacional decree (see HERE). In a press release issued this morning, the CNMC said that some clauses of the decree must either be removed or altered because in their current form they restrict competition and create barriers to the market, thereby unjustly privileging tourism businesses and disadvantaging users.

The CNMC says that it notified the Canarian Government in July that these would have to be changed, and hoped that its suggestions would be taken on board, thereby avoiding appeals against the decree in the Courts. It reminded the Government that it is a legitimate body which has the power to intervene in any such respects where competition is compromised.

The Commission is calling for two main changes, namely to allow private owners of residential properties in touristic areas to be able to register under the VV system because excluding them privileges hoteliers and other formal tourism businesses; and to allow private owners of residential properties registered under the VV system to be able to rent out a room to holidaymakers rather than requiring the whole property to be rented out. The other changes being demanded are to reduce the bureaucracy involved in declarations and compliance, both of which increase the cost to owners to enter the tourism market.

It remains now to see how the Canarian Government responds to this. They have to accept these recommendations or else face legal challenge from the CNMC in the Canarian High Court.

 

62 Comments

  1. Janet, meesage from a friend Angela Webster in Lanzarote reads…… See the ASCAV web site or facebook page for the CNMC press release. They are really on side and putting their heart and soul into it.

    Best wishes

    David

  2. Author

    Thanks David. The press release is HERE direct from the CNMC. 🙂

    Ascav have done and are doing a lot to keep the pressure on, and are making a phenomenal amount of noise, and so I don’t mean to take anything away from them, but this issue was taken up by the Monopolies Commission in its own right a while ago – as the press release says, the CNMC approached the Government on 23 July. Ascav met with them a week or so ago and I’m sure that their pressure is playing a part!

  3. Hi Janet

    Given that the statutes prohibit letting on our residential complex which does not have a tourist licence, am I correct in assuming any changes to the VV won’t alter the situation and letting will continue to be illegal. I understood it could only become legal on our complex if the statutes were changed.

  4. Author

    I see no reference in the Monopolies Commission’s statement to suggested changes in this respect, so even if the Government changes the decree to allow VV registration in touristic areas, it should remain illegal in those complexes whose statutes forbid it. As always with changes to legislation, however, we need to see the final form before making a definitive statement.

  5. Hi all, I see the Hoteliers have got wind of this and are not best pleased. Have a read of this and see if you agree with me that this guy is talking a load of drivel.
    Who has been asking for unregulated letting????
    The man is a moron.

  6. I don’t think that your link has worked? What are you inviting us to read?

  7. Author

    I don’t know the source either because there wasn’t a link, but it is fair to say that Ashotel is steaming over this. They did not want this decree to be paralysed, and are fiercely opposed to measures to loosen it in its reworked form, and will fight any relaxation tooth and nail … . The Canarian Government seems already to be trying to reassure them, and saying that they will not concede on the issue of private rentals in touristic zones, but that is one of the main two issues raised by the Monopolies Commission. I wouldn’t want to sort this out …

  8. It might be this that was linked http://www.laopinion.es/economia/2015/09/22/ashotel-avisa-peligro-alquiler-vacacional/629355.html Interesting point made by the President of Ashotel which I hadn’t considered. If V V’s are allowed in Touristic areas, what is to stop an owner of many apartments in a complex (I guess he is referring to Sole Agents who also own properties) letting go of their licence and changing over to V V regulations, and operating with little or no regulation.

  9. Yes indeed there is that possibility Doreen.
    But what about under the present legislation where the owner on a touristic complex has no protection from the sole agent, who could also own quite a few properties there himself and dictate the terms and rates he charges without recourse?
    Ashotel have never complained about that being an advantage to my knowledge

  10. Another unreasonable restriction in present legislation is the requirement for 100% agreement to enable a complex on touristic soil (either never registered or lapsed touristic) to become officially touristic – when there are more than 200 individuals voting, what is the likelihood that there would ever be 100% agreement on anything?! On such a complex it is wrong that individual owners should be prevented from letting suitable properties. There needs to be a system for all let properties, whether/not under some form of sole agent umbrella, to be individually inspected and registered. The VV regulations set good standards for this, and responsible landlords already try to meet those standards and would welcome an inspection and registration system. The various laws confuse the desired quality requirements with the method by which that quality can be attained and maintained.

  11. The Ashotel President saying that sole agents could opt out and use the VV registration would not be practical – the touristic complexes are the ones featured in brochures, and used by holiday companies with their easy access to thousands of holidaymakers. Cant see them giving those up!
    Of course another way round that would be to state VV licences should only be issued to individuals with a very small property portfolio, eg 1-2 houses/apartments.
    The required standard would have to be attained as per the licence requirements, all taxes would be paid and the Touristic complexes would not be affected as the majority of holidaymakers still book via tour operators.

  12. I do not agree that the requirement to have 100% approval from residents to change the status of a complex is an unreasonable restriction..

    The rights of those who purchased in residential complexes because they did not want to be disrupted by short term holiday renters must be protected. Why is it resonable to force a change in the status of a complex on those who do not want the status to be changed. After all in many cases the residential complexes are peoples’ homes.

  13. I´m very sorry Snowbird but if you bought a property in south Tenerife expecting there to be no holidaymakers there, you are either very naive or you hadn´t done your homework.

  14. I have heard these sort of personal criticisms before. Don’t forget Danny it is not me or my fellow residents who are breaking the law; it is those owners in residential complexes who see the opportunity to make a swift buck who are breaking the law. I am not naive and of course I did my homework. Of course I expect holidaymakers to be in South Tenerife, what a silly comment. I expect them to be where they should be, either in the hotels or in the tourist complexes. When I purchased I was told that holiday letting in the complex I was interested in was against the law. Initially some 8 years ago there were few problems. However there are now many people and companies who have jumped on the bandwagon and are making a living letting to holidaymakers in my complex. They flout the law and do not care whether or not their activities cause nuisance to other owners. My post was about the rights of long term law abiding residents in residential complexes to maintain the residential status of their complex. Apparently you are among those in the “I have the right to do what I like brigade”, even if an activity contravenes the law. If you want to rent out a property in Tenerife buy in a complex deignated as touristic.

  15. The important phrase in the article is “…meet the conditions which the “legal” accomodation sector must abide by.” The private rental owners do (or should) employ local and fully legal cleaning and maintenance staff, and meet all Health & Safety requirements, just the same. To respond to “Snowbird”, I was not in any way referring to complexes built as residential on residential land although the situation is confused where people have chosen to be resident on touristic complexes or residential complexes end up as islands surrounded by touristic activity/land. I was referring to the 1980-1990’s built complexes (so way before the Residential/Touristic divide), some of these originally had the equivalent of sole agents for maintenance and servicing the apartments, usually the original developers who thought they could sell properties and then still generate permanent ongoing incomes by overcharging for cleaning, phone lines etc, and who were subsequently where possible ousted from that role. That is the situation that people really object to about the sole agent system, the lack of rights or any control over the property they have paid a lot of money for, and why the Government need to go back to basics about what they are actually trying to achieve and how to realistically achieve it.

  16. I find it quite annoying, if not disgusting, that the hoteliers believe that employment in the hotel sector is more important than employment in other areas of tourism and somehow the tax euros generated by hotel and apartment complexes are more important than the tax euros generated by holiday letting. We let our private villa and in doing so generate taxes. We employ bone fide cleaning and maintenance companies which, if we and similar others disappeared, I’m pretty certain would not find alternative work in hotels and apartment complexes because, in truth, private letting such as ours is not actually in competition with them. Each have different markets and can all exist side by side but why do so many people refuse to see that? If we and others did not exist our guests would not switch to other forms of accommodation but would switch to other areas of the world.

    And I really cannot understand the “residents who oppose this fiercely” where they live in an economy so, so, dependant on tourism. I can’t exactly speak for Tenerife but in Lanzarote you’d be hard pressed to find anyone (except those who have retired to the island bringing their money from outside) who is, or was, not totally dependant, directly or indirectly, on tourism. Sure, I respect those who live in residential complexes don’t want to share with tourists but the suspended decree takes care of that and the CNMC is not challenging that aspect.

  17. “owners in residential complexes who see the opportunity to make a swift buck”

    I, and I´m sure many thousand other property owners in the Canaries, find that very offensive.

  18. Gosh, I didn’t realise there were many thousands of owners in residential complexes who were breaking the law. Perhaps you are right. In my opinion if you are happy to break the law and to be a nuisance to other owners in a residential complex then you should be prepared to be offended.

  19. Oh snowbird, I love how you put things! Nail on the head every time.

  20. What a mess – I will be glad when it is all sorted out.
    I own a villa in Playa Blanca, Lanzarote. (Which I don’t rent out.)

    Playa Blanca is a purpose built tourist resort and it is full of tourists having a great time, eating, drinking, playing music, splashing about in swimming pools, children laughing and a lot more besides including spending loads of money which keeps the island afloat! Now if that sort of behaviour annoys you don’t buy in Playa Blanca or any other tourist resort – buy inland – watch the sun set, smell the fresh air, see the stars and be happy!
    Ask Janet – she knows.
    Now, when I am in Playa Blanca I can always spot the ‘residents’ – their villas are often half built with piles of bricks outside or if the villas are finished then instead of bricks outside you have got garden gnomes and concrete statues of fairies and elves. Another sort of ‘resident’ having blown their money on their villa they resort to selling second hand cars and 4×4’s – invariably old and dented unlike their dogs which bark non-stop.
    Of course, the easiest way of spotting a tourist resort ‘resident’ is by their angry expression.

    On the other hand, the property next to me is used for holiday rentals. I don’t often hear much noise and if I do, I don’t mind because I am on holiday too and enjoying myself with my children and grandchildren and we are too busy having a great holiday to worry about what the neighbours are doing.
    Salud!

  21. Graham I don’t know anything about Playa Blanca and by the sound of it you know nothing about the neighbourhood in Adeje, Tenerife where I live. You have made a big mistake if you presume that in the Canaries all areas and residents are like those that you have described.

  22. I agree that I ‘paint with a broad brush’ but I think you know what I am talking about.
    With regard to residential areas and letting laws I think we should all take them with a ‘pinch of salt’.

    The laws in Spain are like shifting sand dunes, one minute they are there and by morning they have gone.
    While everyone is worrying that their neighbours should not be letting because it is a legalised residential area someone in the town hall is planning to turn it into a theme park.

    I have no doubt Adeje is a lovely place – lets hope it stays that way!

  23. Author

    Just for clarification, once again, I think THIS might help identify the various levels of responsibility and legitimacy, and the difference between council, cabildo, region and nation …

    I also don’t think, despite updates, supplementary decrees, varying levels of enforcement, etc., that a law unchanged in essence and in place for two decades can be described as “shifting sands” …

  24. How about ‘quicksand’ ?

  25. Janet thanks for your generosity in reporting on this situation over the years. There seems to be a complete lack of any information on the web about this, with conflicting and confusing reports aplenty. Even speaking to estate agents via email, they clearly don’t understand the VV legislation, or at least certainly have not shown me enough of an understanding to have the confidence to buy in Gran Canaria (for my own holidays and for letting out to tourists in the interim), which I would love to do if it weren’t for this protectionist nonsense.

    I just had one question for you, which you may or may not choose to answer – Where do you think this is headed? Does the monopolies commission in spain have enough power to make this happen, or are the hotel lobbies too powerful in GC such that it will get bogged down and/or fogotten?

  26. Author

    Obviously it’s just an opinion, but my feeling is that the Canarian Government is engaged in a constant batting away exercise. Legislation to loosen up the effective stranglehold that the “official” tourism bodies, agencies and businesses have is an exercise in getting blood out of a stone – and when the last decree on Viviendas Vacacionales finally appeared it took around just a month for it to be withdrawn, to be “redrafted” … and then it will have to go through consultation, committee, and then I’d put money on it being appealed again when it finally sees the light of day in its new form. This could take years. Some might think the intention was that it should take years …

    There are very close links – which sometimes look like a revolving door – here between the commercial and political touristic powerhouses. The current Government chief is an ex-Ashotel president, for example. This is something that produces enormous power, and influence. Yes, the Monopolies Commission has power – but nowhere near the same amount of influence. It can get this matter into Court, but that itself could take a fair old while, and then what? Any measures will need to be redrafted, go through committee, consultation, be published, be appealed … again …

    And the bottom line, in my opinion anyway, is that despite everything, and despite the position of any who have vested interests in arguing the opposite, the policy is both legitimate and effective if looked at from a purely commercial point of view. The regional Government has the right to pass such legislation thanks to its EU-granted RUP (ultra-peripheral region) status – and so it can always fall back on its right, granted beyond Spain, of passing protective legislation. Moreover, every single time figures are issued – and I mean independently produced figures – they show that the policy is working. More tourists, spending more money, in a widening and increasing quality market.

    I think that independent lobbyists who want to let their own properties will eventually win the right to do so, but the terms and conditions which will be applied to their permissions will make it very difficult for them to achieve. And that difficulty is in any case very far down the road.

    As I say, this is just opinion … they could announce a free-for-all tomorrow for all I actually “know” for sure, but everything I’ve heard, seen, been told and feel says that that will not happen for a very long time, if ever.

  27. Hi Janet

    Could I ask, should we even now bother applying for a VV license as it seems that these could now be null and void. We have come out to the Canaries to see if we can find out anymore information on what needs to be done to become legal. We are hearing so many conflicting interpretations from other people and when your thread had stated that these VV could be useless, I was surprised to see there are so many companies out here offering to submit an application on your behalf and and charge you a hell of a lot of money for this !

    Is it now just a matter of waiting again to see the outcome in the New Year ?? I don’t want to pay for something that is not worth anything.

  28. Author

    you can’t apply at the moment because the decree has been frozen. As I say HERE, on the Q&A on Illegal Letting page:

    Q: Some agencies are claiming that they can obtain a VV licence by submitting documents, floor plans, photos, NIE, etc, and paying them a fee of around €600 in total … and that you can then legally let while the decision on your application is pending. Is this claim all nonsense?

    A: THIS explains your options – the full, and only, options for private individuals to let their properties privately. With regard to registration with the Canarian Government (there is no “licence” as such), this only applies to just one sub-type of letting – the new “vivienda vacacional”. Registration with the authorities is not required in any other type of letting. If you want to let as a VV, then you need to check that your property is not in a touristic or touristic-residential area because it is not allowed in these areas. In other words the property must be in a purely residential area. The council will confirm the designation of the area your property is in. This check can be done for free with the local council – and you need to do this first before you hand over any money not just because you can do it yourself, but also because it could be that you can’t let out anyway other than with short- or long-term contracts. If that is the case, any money laid out for VV registration would have been completely wasted. Even if it becomes clear that you can rent your property as a Vivienda Vacacional under tourism legislation because the area is purely residential as far as the municipal PGO is concerned, then you also need to check your community statutes if your property is on a complex. This is because the decree excludes registration for any properties where community statutes ban touristic use. Provided your property is in the right area, and provided touristic use is not prohibited in your complex, and provided you are registered for IGIC, and fully compliant with the terms of the decree HERE *, you can register to let under the Vivienda Vacacional legislation. This is best done with a qualified lawyer because if there is any problem with a fine of any sort you have the lawyer’s professional indemnity behind you, but in my opinion the time to appoint a lawyer is once you’ve established that your property can be let under the various conditions imposed by the VV decree.

    As I say, however, the whole thing is now frozen. There is no conflicting information: the decree is frozen while it is redrafted. Yes it is now a matter of waiting again to see the outcome … but you will need wait far beyond the New Year, I think. As I said immediately above your question in answer to Matt, this could take some considerable time before there is legal clarity.

  29. Thanks Janet very interesting. It’s a shame as I’m sure it suppresses property prices on the island. If only they were as obsessed with house prices in Gran Canaria as we Brits are in the UK…

  30. There’s nothing wrong with property prices in residential areas remaining low enough to be affordable for those who live and work in them.

  31. Author

    They need to stay relatively low, too, because the average wage in the Canaries is €12,000 a year …

  32. From what I can make out before my eyes glaze over, it’s basically just confirming that the complaint filed against the VV decree has been received by the courts and will be looked at. I’m sure Janet will keep us all updated when anything interesting is announced.

  33. Author

    Nova is correct. It is confirming officially what we already knew, that there is a complaint by the Monopolies Commission which calls on the Canarian Government to remove restrictions and modify the decree. As we also already know, the decree is paralysed while it is being redrafted. This, as they say, could take some time.

    For what it’s worth, the Canarian president, Fernando Clavijo, only today confirmed at FITUR 2016 (the international travel fair in Madrid) that the Canarian Government is committed to its legislation, and to outlawing “unfair competition”.

  34. Speaking of FITUR, I had heard “illegal renting” was to be discussed there this year … and seeking some background came across THIS article about Barcelona where booking.com have agreed not to advertise any properties if they do not have a licence (and HomeAway & AirBnB are expected to follow) – I wonder what the Monopolies Commission would make of that ?

  35. Hi Janet

    My villas are in a residential area with no community. Can I rent the properties short or long term ?

    Brian O Cleary

  36. Ever useful Janet, due to your information have been enjoying the Spanish lessons and community church in Calleo.

    A recent meeting with our administrators left me in no doubt of the ambiguous and hypocritical state of the ” letting” saga. Some long standing owners have had dozens of ” guests ” during the year, on passing chats with these, they obviously have no idea who the owners are, but have been coming in some cases for 10 years. These properties are not advertised, and a blind eye is used by the community apparently. On the other hand, in two other cases with East European owners, the properties are openly advertised and I personally have counted 20 different groups of ” guests” some stay for just a few days and naturally have absolutely no regard for the development or ambiance. I do wonder where these people go but that,s a different issue.

    This is no doubt repeated throughout the Islands, I am not therefore illuminating or offering a solution except that there is a huge unofficial industry, no officials including administrators are willing or able to help, on large complexes it must be a very real issue. One question simply, the number of visitors, from which source do those figures emanate? Is it airlines, or registered hotels etc. If the latter, they must be pretty inaccurate.

  37. Author

    I don’t know for certain how they compile them, but I would imagine that at least in part they derive from flights, and from touristic accommodation stats (legally touristic establishments are required to compile stats to provide details of those staying in them).

  38. I have only just noticed the latest post on this subject suggesting that the revised law could now allow touristic letting to holidaymakers in residential properties in touristic areas, subject to certain conditions relating to security and quality.

    This is really disappointing news for those people in residential complexes who thought they were buying a home and who have had to endure the commercialisation of their complexes, with the constant nuisance of holiday makers coming and going week in and week out around them.

    I will be interested to see whether the rights of these owners who have until now obeyed the law will be protected; that is the right to peacefully enjoy their homes.

  39. Author

    In my own opinion, and bearing in mind that there is absolutely no clarity yet as to “conditions”, I think it will be up to communities as a whole to establish internal rules that are strong enough to deal with “nuisance”. Most complexes have rules about noise after or during certain hours. I think that residential complexes in tourist or mixed areas now need to beef up their protection of residents’ rights.

  40. Hello Janet
    Many thanks again for the update. I assume the V V relaxation of the existing letting laws do not apply to touristic complexes, where all lettings should be done through the sole agent or is this likely to also change?
    Regards – Ken Shade

  41. Author

    The VV has only ever applied to residential complexes. Tourism law is unaffected, and the sole agent system applies exclusively.

  42. Janet,
    Our complex was a mixed Hotel/Private community ,it had a Touristic Licence but lapsed when majority hotel part withdrew .
    We are supposedly “dormant” and the President & Administrator have been “working ” towards renewing our licence over last 4 yrs spending a fortune on upgrading the complex with no sign of approval .
    In fact we haven´t even had a vote to see if we have 100% approval !
    How do we stand under this VV development ? Would we qualify although we were previously designated Touristic ?
    As usual thanks for all your work on this site !

  43. Author

    I don’t know, John. My understanding is that there’s not technically a “lapsed touristic” category, just one thing or the other. I believe that Turismo was seeking to make it easier for residential complexes that used to be touristic to regain that status but I heard no more about it. My stance would be that your complex is currently “residential”, and as such, depending on what is in the decree when published, of course, it should be possible for owners to register to let individually.

  44. If the law is revised as indicated it will be a real kick in the teeth for those owners who specifically thought they had bought a residential home. As for the internal rules being made stronger, my experience is it will depend on whether that complex is more pro letting than against. If as it was on the complex I was on and where despite it being residential the vast majority continued holiday letting, with the blessing of the President/Administrator and his mates on the committee, any complaints about tourists will be brushed aside. They may have a quiet word with the owner responsible but they certainly wont amend or tighten any of the rules because they all have business interests on the complex.
    What if any redress do owners have who were sold a property as ‘residential’; only now to discover they will be surrounded by 24/7 tourists and the socialising they have gone on holiday to enjoy.

  45. Author

    Bear in mind that the new decree already allows owners of residential property in residential areas to register and let out privately. What the redraft would allow (it seems) is that the permission would be extended to areas that are touristic and so already have tourists in them.

    I hear what you say about people buying in residential complexes specifically because they didn’t want to be surrounded by holidaymakers but the Government has been forced to make these concessions because of legally-enforceable demands from the Monopolies Commission, as well as in part by pressure from associations like Ascav, having originally been forced into some regulation by the requirements of national legislation intended to make the rental market more flexible, as I posted HERE

    The only consolation – which I know it won’t be – is that at least there is a route for owners to let legally, and as such it will be regulated. Violations carry hefty fines, and those who don’t even register will be breaking the law and risking fines in the tens of thousands … and now there will be no excuse because the route for letting legally will exist. Denuncias for any violations in any respect go to Turismo, as before, and can be made by communities (headed by the President) or by individual owners or groups of owners (most effectively if they engage a lawyer to do it for them).

  46. and presumably compliance with the statutes of the community will still be a condition for legal VV letting?

  47. Author

    Since that’s a requirement in the current degree, I would imagine that it would simply extend to properties in those areas the redrafted decree will include.

    I cannot imagine a circumstance in which they would remove that requirement for those properties currently covered by the decree even if they chose not to extend it to the properties in areas newly covered.

  48. Janet, with regard to the court judgment against the decree, are the other 4 judgments that are due shortly related to the first, or are they separate cases? Either way, do you know what they are about?

  49. Author

    all the same thing just different plaintiffs, as I understand it.

  50. I am a little confused Janet. Does this mean that if your apartment is in a “touristic” complex you can now do short term rentals? If so, does there have to be an exploitation company managing all of the rentals or can you organise these individually?

  51. Author

    This is not about touristic apartments. The above post is about private holiday lets of residential apartments. Nothing else. It concerns a decree (the Vivienda Vacacional decree) allowing private residential apartments to be let out for holidays, and the decree is additional to tourism “law”, which is the same as it always was in terms of tourism, requiring owners of touristic apartments to let out for holidays through the on-site sole agent and no-one else.

    I’ve outlined clearly HERE what the rules are for both residential and touristic properties. When you read it, please note that in any case there is a clear difference in law between short-term and holiday rentals. Short term contracts are not holiday contracts, indeed there are rarely “contracts” with holiday lets. For a full description of “short-term” contracts please see HERE.

  52. I would envisage in the medium term that touristic complexes will become vulnerable to the community of owners. If the incredibly poor rental returns persist, then hopefully the option will exist for owners to vote for the removal of the exploitacion agent and for the touristic license to expire.
    Owners can then register their own individual properties (assuming the community statutes do not prohibit rentals) and either manage their own rentsls or employ the services of an agent.
    The returns on 80% of touristic complexes will them be hugely improved. Especially on the Spanish owned apart hotel complexes such as the Hovima chain where the return to owners is a complete joke at a couple of hundred euros as month for properties that cost in excess if 100,000€ plus taxes and fees.

  53. Unfortunately none of this addresses the fundamental problem identified by Andy Ward, of the complete unfairness of the sole agency system. This allows these agents to set their own rules with no regulation and results in larger Hotel Groups such as Hovima to treat owned apartments almost as timeshare.
    The chances of outvoting them at a community meeting is nil as they own 75% of apartments in their various complexes.
    If the government is determined to keep this archaic system then they need to fairly regulate it.

  54. Author

    I do agree, but that is an issue for tourism legislation intrinsically. Just to be clear for anyone who mightn’t be sure: the VV decree is purely about residential property.

  55. So where a touristic complex has a terrible agent, and where that agent does not hold a majority, the best plan for owners now will be to oust the agent, let the touristic license lapse (like Los Geranios for example) and then license their apartments individually and set their own terms for rentals.

  56. Author

    That’s wouldn’t be as easy as it sounds. “Lapsed touristic” is not a legally recognized designation even though it’s the wording we always use. Even if the agent has lapsed, and even if one has to “reapply” to install a new agent, the community never actually becomes “residential” because it’s not the “default” option for anything that’s not touristic. A touristic community without an agent is just that, not “residential”.

  57. It changes by the week .I don’t ever think it will be sorted out and when it is people will still carry on doing what they have always done in renting for cash to ” family & friends “. Tenerife does not have the manpower to stop what they have turned a blind eye to for years ??

  58. Thank you for the update Janet. Can you clarify for me what the “Autonomous Community” means in your post please? Does it mean the Canary Islands Government? Many thanks.

  59. Author

    yes, exactly that, the Canaries is an Autonomous Community in Spain. Spain is a federation of autonomous communities, each one governed by a regional parliament with significant devolved powers – tourism being one of those powers.

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