The new tourist law - what kind of tourist rental will be legal in the future?

At the end of July 2017, the Balearic Government published the new rules on vacation rentals in the BOIB, the Official Gazette of the Balearic Islands. Prior to this date, holiday rentals in Ibiza where legally limited to detached houses only. The lease of any other type of property, such as apartments or townhouses, was not stipulated in the Balearic legislation and therefore came under a legal grey area. In accordance with the new legal framework, a tourist license may also be obtained for apartments and townhouses, but only in certain cases and fulfilling certain requirements. Violations will be sanctioned with very severe fines.

Within a year we will know with certainty which types of properties can be rented to tourists given that there is a moratorium of one year in place. Within this timeframe, the Island Council and the municipalities will have to decide which areas will allow holiday rentals. Only thereafter will new licenses be granted. This means that the Ibiza Council has not been accepting tourist license applications for single-family homes since the end of July. And, given that in Ibiza the rental of apartments for tourism purposes was also prohibited, licenses cannot be obtained for these cases either.

So, for the time being, we must differentiate between the following cases: Any property which was already registered as a tourist let with the Council, can continue to be rented normally. Owners of detached houses who obtained a tourist licence in the past few years will scarcely be affected by the changes brought by the law as these will be minimal. There are, however, numerous applications for licences still waiting to be processed and approved by the Council. If, in the course of the proceedings, it is discovered that the property does not have the mandatory habitation certificate or has annexes that have not been made legal, the licence may be refused and the application would be prescribed with retroactive effect.

In the future it will also become possible to rent apartments in residential buildings but only under certain conditions. First though it will be necessary to wait for the municipalities and the council to divide the island into zones, determining which will allow summer rentals and how many will be on offer. In addition, properties will have to meet certain quality requirements and provide certain facilities. It should be noted that, in the case of a community of owners, vacation rentals must be approved by the board of the community. Another novelty of the law states that the owner of a flat which is used as a primary residence may rent it to tourists for a maximum of 60 days a year.

The Balearic Tourism Law will make seasonal rentals difficult given that rentals of less than one month are considered as tourist lets under the Spanish Urban Rental Law (LAU). Therefore, in the future, any landlord who rents a property for less than a month will either need a registration number from the Council or be able to prove that their tenants’ stay is due to purposes other than holidays. Even when the holiday rental contract has been created in accordance with the Spanish Urban Rental Law, the landlord cannot advertise the property through portals such as Airbnb or HomeAway. If they do, they could face fines of up to 40,000 euros and, in addition, the authorities may order the temporary cessation of their business. Fines can range from 4,000 euros for minor infractions up to 40,000 euros for serious infringements. For very serious violations, the law can enforce fines of up to 400,000 euros. •