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The Canary Islands holiday rental law
The Canary Islands holiday rental law

According to the Tourist Movement on Borders agency, Frontur, Spain received 13.7 million international visitors during the first quarter of 2018, a 6% increase on 2017 figures. With 1.4 million visitors choosing to stay in holiday rental accommodation, a healthy increase of 7% year-on-year, and that’s just the official figures. Taking into account that many short stay homes remain unregistered in Spain, we expect the actual figure to be much higher.

It’s been five years since the Spanish government excluded holiday rentals from the LAU (Ley Arrendamientos Urbano) and delegated the task of regulating the industry to its 17 regional governments. There are only a couple of the 17 autonomous communities that as yet haven’t regulated holiday rental accommodation. Find out the latest status in your region.

The Canary Islands holiday rental law

The Canary Islands holiday rental law has been controversial since it was first introduced in 2014. There were articles within the law that made it impossible to rent out hundreds of holiday properties on the islands, such as the obligatory rental waiting period, the need to rent the property as a whole unit and the exclusion of holiday rentals from touristic areas.

The High Court of Justice of the Canary Islands (TSJC) has revoked these articles from the decree 113/2015, which regulated holiday rentals on the islands.

This has followed an appeal filed by the National Commission on Markets and Competition (CNMC), which stated:

“It makes no sense to exclude the industry of holiday home rental from those areas where the highest level of tourist activity exists”

This is why the TSJC has decided to revoke the prohibition of renting holiday homes in popular tourist areas. Action was taken following the observations made by the National Commission on Markets and Competition (CNMC), they said: "The only plausible explanation for this law, seems to be that it was in favour of supplying tourism to only the hotel industry." The law itself, violated the freedom of business, the provision of services and the regulation of competition between companies, which unfairly limited the tourism services the Canarian archipelago could provide. The Spanish Federation of Holiday Rentals Associations (FEVITUR) agreed and approved what CNMC affirmed.

"There is no reason to refuse an individual guest who only wants one room, you cannot put the price of the entire holiday home on one room or otherwise lose a booking."

TSJC judges stated that the law clearly prevented private holiday rentals to fairly compete with hoteliers. Private tourism accommodation makes up a great proportion of the tourism services on the Canary Islands and the law which prohibited these services greatly restricted the prosperity of the Canarian tourism industry.

“Delaying the start of the rental period during the registration process has been deemed an unnecessary administrative burden by judges, who state that it restricts free business within the rental market.”

Until the decision of the TSJC, holiday rentals had to wait during the period between they submitted the application form and they had green light to rent their properties. 

Regions of Spain rental period 

In most regions of Spain, the rental period can begin from the moment the registration paperwork has been submitted. The rental period is not delayed between the day of submission and the day of licence approval, this is the case, however, for the Canary Islands.
TSJC judges state that this decision is an unnecessary administrative obstacle. It hinders the rental process by slowing the acquisition of the autonomous rental licence and flooding the government offices with a lot of paperwork over a short time period.

The general public, and holiday rental home owners in the Canary Islands, now have a period of one month – until 21st June 2018 - to have their say on the proposed regulations before the final wording of the law is drafted and approved in approximately 4-6 months’ time.

The proposed law is expected to be approved and come into effect between October-December 2018 and will replace the existing holiday rental licence law established in 2015.

If the proposed law is approved, holiday rental owners will have a period of 6 months adaption and will have to display their holiday rental licence registration number on all advertising.

The islands of La Palma, La Gomera and El Hierro are not affected by this new proposed law.

According to the draft of the new regulation of holiday rentals in Canary Islands, owners can rent their property to tourists if it meets these criteria:

– The property must be in an area defined as RESIDENTIAL (or consolidated residential area within a Tourist area, and not forbidden in municipal urban planning).

– Tourist rentals must not be prohibited in the Statutes of the Community of Owners.

– The property must have a First Occupation licence or an official declaration from the Ayuntamiento and a Certificate of Habitability or Structural Safety Certificate issued by a competent technician.

A new measure allows owners to start letting out immediately after their application to start rental activity (the owner’s formal declaration).

The Cabildo will provide the applying owner with complaints forms and a plaque.

Once the registration number has been obtained, the law envisages that the corresponding documentation for the rental activity will be provided online. The claim sheets and advertising poster can be printed off.

Dwellings previously registered with the Cabildo have six months to be adapted to comply with the new regulation.

Internet holiday home portals must include in their advertising the property’s registration number in the general tourism register of the Autonomous Community of the Canary Islands.

2018, 5 of October
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