Small property owners worried as Canary Islands Parliament readies to vote on vacation rental laws once more

The Autonomous Government of The Canary Islands’ Parliament are, over the next 48 hours, allegedly proposing a new and controversial set of changes to the vacation rental laws.

The Canarian Holiday Rental Association (ASCAV), themselves informed by some of the top real estate companies on the islands, have said that they foresee the approval of the modification to the tourism laws, scheduled for Tuesday and Wednesday in The Canary Islands’ Parliament, being an “authentic bomb” dropped on Canarian families and an “attack” on their rights as owners.

According to the association, the proposed law implies that long-term rentals can no longer be made in tourist areas nor holiday rentals, nor will owners be able even to reside in these properties, except under the “very limited” stipulations of the current transitory disposition of the Ley del Suelo.  That is to say, holiday rentals have to be controlled by a licensed tourism property operator, on their terms under agreement with the majority of owners of any communidad in a tourism designated property or complex;  residential use is only now recognised if the property was registered properly prior to January 2017, following the last outcry against such moves.  If not then it is unlikely to be allowed moving forward in the land areas designated for tourism.  It remains to be seen how such a law would be enforced.

These being the last few days of the legislature before the real down-and-dirty electioneering, both local and national, begins in earnest; news reports and commentators are all pointing fingers at who is to blame for the arrival of this new bill, which originally started out dealing just with tourism renovation and modernisation, and somehow over recent weeks and months has mutated in to what is being seen as a second attempt to limit and curtail small property owners, to the benefit of the monopoly holders, big hotels and large tour operators.

It seems everyone has an axe to grind at election time, but don’t be put off, this is important for many

The left wing progressives of Podemos find themselves strangely aligned with the conservative old guard of the PP, in resisting this new set of laws that, we are told, will favour big business and harm small property owners in tourist areas who may wish to utilise their holiday homes to generate income from tourism.

Many of the most vocal commentators are laying the blame for this “attack on the rights of small property owners” firmly at the door of the regionalist parties, Nueva Canarias and Coalición Canarias, who drafted the bill, with the support of the PSOE Socialist Party. They are accused of trying to “pass a law that will dynamite any way that individuals can make their bungalows or apartments in tourist areas profitable through tourist rentals, in the closing moments of the legislature.”

Editor’s Comment:

It does seem strange that Canary Islands focused regional parties, NC & CC, with the support of the socialism oriented PSOE, appear to be intentionally harming or trying to limit citizen freedoms without at least having very good reasons to do so, if that is indeed what they are proposing at all.  That said, however, there must be some very strong arguments for protecting “tourism” designated lands, and trying to regulate the ways in which they are operated.

According to much of the right leaning press these parties are aiming to “raise a de facto ban”, by stealth, “on the rental of holiday homes in tourist areas of the Canary Islands and to strike a new blow against the rights of the small owners of bungalows and apartments.”

Stranger still is this painting of the PP as heroically in opposition to a law that it is said will benefit big business over small property owners.  A consistent voice throughout all of this appears to be Podemos, the anti-corruption party, who now find themselves in a theoretical unholy alliance with the PP who have, it seems, been the party most deeply mired in corruption investigations and scandals over recents years and in some cases stretching back decades. Yet there we have it…

As we head towards election season the islands have seemingly been turned on their heads, with a topsy turvy re-introduction of a new Frankenstein’s Monster 2.0 version of what must be one of the most controversial sets of laws in recent years, which when introduced back in 2015 sparked protests and led to very public outcry, particularly on the south of Gran Canaria, in defense of the rights of property owners in tourist areas, and the rights of citizens to also be allowed to compete and benefit from the main industry of the islands, alongside the interests of the much bigger businesses and the powerful hotel industry lobby.  A view that was more than once shared by the courts.

Of course it is right that the industry is regulated and that accommodations offered to tourists are required to maintain standards, and it is right also that incomes are properly declared and that tourists rights are protected, however forcing owners to have to deal with large operators, on unfavourable terms, or not be allowed to deal in tourism at all must fail in the end.  As must all those trying to continue with their own unregulated, undeclared private rentals to tourists, which in the end are a theft and a deceit.  There must be a better way… In 2019 the gig economy is alive and well, airbnb, booking.com and a whole host of other platforms continue to grow and surge forward in destinations around the world, while the canary islands try to limit the relentless onslaught of current and future technologies, and for what benefit?  The danger is that small owners and investors will be pushed from the market, deterred by unclear rules and unfair moving goal posts.

Anyone who has owned their property since 2015 or before should already be very aware of their obligations, to not be, is to have failed to do the homework or listen to the proper advice.  It is those newly arriving to the market who could potentially lose or simply decide against investing here.

The impact of the measures proposed will not be limited to tourist areas, warn those who oppose the new bill, the new law will open a wave of legal insecurity allowing each town council, each city council and the regional government itself to “arbitrarily establish general or zonal limitations to holiday rentals, limitations that may also be indefinite or temporary.”

Judgments reached over the last 4 years by the Supreme Court against the decree on holiday rentals currently in force, as well as numerous warnings from the National Markets and Competition Commission, are simply being disregarded say the new bills detractors, claiming that it invades central state powers and “seeks to violate the rights of homeowners under Spain’s Horizontal Property Law (LPH).

According to one local commentator and journalist Teresa Cardenas “The LPH is very clear when it says that the statutes of a community [of owners], which regulate among other things the permitted uses of the houses [or apartments], can only be modified with the unanimous vote of all the owners. The Parliament of the Canary Islands is now completely ignoring what this law says and instead intends to pass a [regional] law that reduces that unanimity to only a three-fifths majority. So, if you would like to register your home as holiday accommodation, you will now have to provide a certificate from your community in which, by a three-fifths majority, you are expressly authorised to rent the holiday home.”

ASCAV have gone as far as to say “If you have an apartment, you should know that your property will not be worth anything if this law gets through: you can not do anything with it except deliver it to an operating company or use it [yourself] on weekends”.

Additionally, ASCAV points out that the proposed penalties increase up to €300,000, is “totally disproportionate”, as is exceeds “by far” the values ​​of most properties.

“Not only are the rights of these owners going to be guillotined, but also the real estate companies will protest: who will buy a tourist apartment or a holiday home with these limitations? The sales falls will be spectacular” predicts ASCAV.

ASCAV insists that the law is a “real plunder” of owners of apartments and holiday homes as well as Canarian companies, doing “everything to leave the business in the hands of the usual [few]” while ignoring the outcries of the population as well as the pronouncements of the Supreme Court.