How (not) to bypass regional Holiday Home Laws in Spain

Raymundo LarraĆ­n Nesbitt, February, 9. 2018

Photo: Nah ah! Judge Judy with her hallmark “no wagging finger”

 

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
9th of February 2018

 

Almost every region in Spain has regulated holiday homes over the last five years. These regional regulations define what is understood by ‘holiday home’. Boringly, almost every region has made a carbon copy excluding long-term rentals. So effectively, if your rent out your property long-term you do not have to comply with pesky holiday rental laws.

Now this is where it gets interesting. In the Balearics Islands long-term rentals are understood as those where a property is rented out to the same individual for more than a month. In Andalusia, a long-term rental is understood as leasing a property to the same individual for over 2 months.

Some would-be landlords, that lack the legal requirements to offer their plush properties as holiday homes (i.e. have NOT attained what is known as a Licence of First Occupation) or quite simply because they can’t be bothered to comply with the raft of new rental laws, are resorting to a devious mechanism to circumvent existing holiday home regulations. They are renting their properties out as fake ‘long term’ to intermediary companies, for say 8 months, and these in turn are busily subletting their properties short-term as holiday homes through property portals.

Landlords are all too aware their property is being sublet, as they purposely ‘forget’ to add the typical clause forbidding sublets which any lawyer worth his salt would advise. More on this in my blog post: Let-to-buy contracts: do not forget to add a clause forbidding sublets!.

These people think they are being smart flaunting existing regional holiday rental regulations. The fact is that regional inspectors will trawl internet ads on any portal (even if located and marketed outside Spain) and if the (Spanish) properties being offered as short-term accommodation lack the mandatory alphanumeric code or tourist licence registration number it will raise a red flag. Inspectors are not going to complicate themselves and will simply fine the registered Spanish property owner/s. Ignorance of law does not exempt from its fulfilment (article 6.1 of the Spanish Civil Code).

What this means in laymen’s terms is that all those property owners who mistakenly believe they have outsmarted regional laws on renting out their lush villas purportedly as long-term lease agreements, when in reality they are being offered by intermediaries as short-term accommodations in exchange of thousands of euros a week, are going to be landed in the future with humongous fines, plus penalties, plus interests on top. They are simply deluding themselves. More on landlord fines: Andalusia starts fining holiday home landlords.

The only legal way to circumvent holiday home regulations is signing a seasonal contract as explained in detail in my article: Seasonal lets: an alternative to holiday home rentals – 8th of October 2017. Taking alternative ‘options’ is simply chancing it. Failure to pay fines (and associated penalties) will result in a charge being placed against your property which may even lead you to lose it.

 

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Larraín Nesbitt Lawyers is a law firm specialized in inheritance, conveyancing, taxation and litigation. We will be very pleased to discuss your matter with you. Please contact us for a free initial consultation. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88 or by completing our contact form.

 

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