Renting your home for tourists in the Canaries: the current legal framework

26.05.2016

The Canary Islands are long established as one of the most relevant holiday destinations in Europe due to the weather and because of the wide range of accommodation services available in the Archipelago.

It is well known that the main economic activity of the Canary Islands is focused in Tourism, and that there is a notorious increasing demand of real estate investment made by foreign people with the purpose of having a second home in the Canaries and, in addition, to intend such real estate to be used for tourism accommodation.

Thus, the possibility to carry out the activity of “Holiday Rental” is one of the main goals pursued by many investors in the islands, both Spanish or from abroad.

The Holiday Home meets the growing need of a family-orientated tourism, which prefers to stay in private housing units, away from hotels and holiday resorts with a predefined service, and even helping to reactivate diverse areas of rural tourism.

With regard to the normative regulation applied to the so-called “Holiday Rental” it is worth mentioning that a large number of regions in Spain have regulated this accommodation modality, although in the Canary Islands, this regulation has been suffering amendments and some of them of major relevance.

In the eighties, the “Holiday Home” was considered by law as any housing that, regardless its furniture condition, equipment, facilities and services, it is offered for rent with holiday and tourism purposes. In order to perform this activity, it was only necessary to communicate it to the corresponding Island Council.

In 2010, the Government of the Canary Islands specifically excluded the “Holiday Home” from the accommodation modalities permitted in the Islands, leading to the initiation of numerous sanction procedures. However, the activity continued its development.

In the light of this reality, the Government of the Canary Islands approved on the past 28th of May, 2015, the Decree 113/2015 by which is approved the Regulation for Holiday Homes in the Autonomous Community of the Canary Islands. A fact not exempt of controversy. The Body in charge of granting the authorization for the development of the rental of holiday homes corresponds to the Island Councils.

The application of the said Decree was paralyzed by the Government on the past 9th of September, 2015 due to the pressure established by the National Commission for Markets and Competition, among others, since the rules included in the Decree were absolutely restrictive and disproportionate concerning the requirements demanded to the owners of the properties and the areas in which the activity would be permitted.
Later, the abovementioned Commission filed an administrative appeal before the High Court of Justice of the Canary Islands against several articles of the Vacation Decree, which has been recently admitted to be processed.

Among those restrictions we can find the express exclusion from the scope of the Decree to those houses located in tourist land, areas or urbanisations that, due to their own nature, are a usual location of holiday housing. This shows the disadvantage of the holiday rental against the traditional hotel accommodations. In addition, the possibility of renting individual rooms it is also excluded. Finally, regarding the minimum equipment for the rental of the holiday home, the Decree requires certain equipment completely unnecessary and out of proportion, compared to the traditional tourist accommodation.

For this reason, the regulation contained in the Decree is considered to impose several requirements which set limits to the free competition and the development of the tourist accommodation offer in the Archipelago.

However, this paralysis status of the Decree does not imply in any case its derogation, it is still in force and under application so that in the present, the requests submitted before that paralysis time are still being processed before the different Island Councils.

As a preliminary step to the start of the activity, the owner of the house or the entity responsible for its operation, must formalize a declaration addressed to the relevant Island Council, which reveals compliance with the requirements of the law. The Island Council will enter automatically, within a maximum period of fifteen working days, the information on the operation of the holiday home, in the General Registry of Tourism of the Canary Islands, and the complaint forms, the poster and the inspection book will be given to the responsible person.

Moreover, prior to the occupation of the house, it is necessary for the user and the assigning party to sign a document in which, at least, should be stated the contract terms, schedules, number of persons staying in the house, and prices for the accommodation (IGIC included). The document must be drafted in Spanish and English language, at least.

The implementation of the Holiday Decree by the different Island Councils is currently being characterized by a legal uncertainty and ineffectiveness of the same.

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