Renting Your Holiday Home In Spain - Potential Pitfalls

Renting out properties as tourist houses or apartments (Viviendas de Uso Turístico, or VUTs) in Spain can be lucrative, but there can be significant legal and regulatory challenges. Individual investors can find themselves entangled in complex legal issues after deciding to rent out their property. While the prospect of additional income is attractive, the reality may involve navigating a maze of regulations and even potential conflicts between different authorities.

Complex Regulatory Landscape

Spain's regulatory environment is multifaceted, with three levels of government—national, regional (Autonomous Communities), and local—each playing a role in tourism and land use regulations.

National Level: At the national level, VUTs must maintain a registry of guests and report this information to the Ministry of Interior at the time of the guest’s arrival. This is a crucial step for compliance, but often overlooked by property owners.

Regional Level: The Autonomous Communities regulate tourism within their territories. These regulations typically address comfort, tourist treatment, minimum equipment standards, and traveller rights protections. The “declaration of responsibility" system allows property owners to declare compliance with these requirements and start operating immediately. However, this system also mandates compliance with additional laws, such as urban planning, environmental, health, accessibility, and consumer protection. This can lead to legal pitfalls due to misunderstandings or unawareness of the full scope of applicable regulations. 

Local Level: Local municipalities are responsible for urban planning regulations, which vary greatly across Spain's 8,000 municipalities. Cities like Madrid have stringent rules, such as the “independent entrance” requirement for tourist apartments. However, other municipalities may rely on outdated regulations or lack clear guidelines. This inconsistency and lack of transparency can result in many VUTs operating without the necessary licenses. Widespread non-compliance used to be common but since the prohibition of advertising on sites such as Airbnb and HomeAway without a tourism licence number came into effect non-compliance has dropped drastically.

Penalties and Enforcement

Violations of both tourism and urban planning regulations can lead to substantial fines. Property owners might face penalties from both regional and local authorities simultaneously. Enforcement agencies are increasingly using online data to identify unlicensed properties, although their resources are limited. Even if an owner ceases operations following a cease-and-desist order, penalties can still be pursued within the statute of limitations, typically four years for urban planning violations.

Homeowners’ Associations

Recent legislative changes allow homeowners’ associations to impose restrictions on tourist apartments. These associations can ban such rentals or increase community fees to offset the additional wear and tear and disturbances caused by short-term rentals. However, implementing these measures requires formal procedures and registering changes with the property registry, which can be both costly and time-consuming.

Operating Without a License: The Risks

Operating a tourist apartment without proper licensing is fraught with risks. Apart from high penalties, there is the risk of legal disputes and potential forced cessation of operations. Unlicensed properties are increasingly being identified through online platforms, and owners are held accountable for compliance failures even if they attempt to rectify their status post-violation.

Conclusion

Properly managing a tourist property in Spain requires preliminary research and professional advice to navigate the regulatory environment. The overlapping and sometimes contradictory regulations from different government layers create a challenging landscape. Until there is harmonisation and standardisation of these regulations, property owners must be aware of the different levels of applicable laws.

None of this is to put you off from renting your holiday property for part of the year, simply to advise you to do so within the applicable norms. And, of course, we are there to help you find your way.