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

Raymundo Larraín Nesbitt, February, 9. 2018

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

By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Lawyers
9^th 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 – 8^th 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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Rental-related articles

Renting in Spain: Top Ten Mistakes – 8th of June 2011
Let-to-Buy in Spain: The Smart Choice – 8th of April 2012
Letting in Spain: The Safe Way – 10th of October 2012
New Measures to Bolster Spain’s Ailing Rental Market – 8th of July 2013
Tenant Eviction in Spain – 8th of June 2014
Holiday Rental Laws in Spain – 8th of March 2015
Holiday Rental Laws in Andalusia (Decree 28/2016) – 8th of February 2016
Decree 20/2002: Andalusia’s Holiday Rural Rental Decree – 8th of April 2016
Urban Rental Law in Spain – Spain's Tenancy Act – 8th May 2016
Renting in Spain - Landlord´s Taxation – 8th of January 2017
Renting in Spain: Non-Resident Landlord's Rental Tax Relief – 14th of January 2017
Community of Owners in Madrid to bar Holiday Rentals – 29th June 2017
10 Questions you Should Ask your Agent on Leasing Office Space in Spain – 24th May 2017
Holiday Rental Home Taxation in Spain – 8th July 2017
Holiday Rentals in Andalusia Made Easy – 3^rd July 2017
How to inspect an off-plan property overseas – Q&A with The Sunday Times. July 2017
Holiday-home lettings: Do NOT register with Andalusia's Tourism Registry unless you are fully compliant – 21^st of July 2017
New Balearics Holiday Rental Law – 8^th of September 2017
Seasonal lets: an alternative to holiday home rentals – 8^th of October 2017
Let-to-buy contracts: do not forget to add a clause forbidding sublets! – 20^th October 2017
The magic of lettings in Spain – 21^st November 2017
7 illegal clauses in Spanish rental contracts – 8^th January 2018
Holiday Rentals Accounting Service (HRAS) – 16^th January 2018
How (not) to bypass regional Holiday Home Laws in Spain – 9^th February 2018

Please note the information provided in this blog post is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.