Tourism law – fines when letting apartments

WE are back to the topic of Tourism Law, and the fines imposed on some landlords letting out their properties illegally.

An interesting search by Canarian Weekly has uncovered lots of information about landlords who have been fined because they have not been registered with the Tourist Board of the Canarian Government.

Over the course of many years, clients have asked me whether they have to register to be deemed legal landlords and the answer is not that simple.

We have to be careful not to get confused between a civil law matter (which relates to long term or short term letting agreements) regulated by the Rental Agreements Law or Civil Code (approved by the national Parliament) and that of the administrative law (authorisation to operate a tourism activity which includes tourist rental agreements) which is regulated by an Autonomic Law (i.e one that is approved only by the Canarian Government).

The administrative law is the area that covers the area of tourist property rentals, it’s a tourist activity and consequently you have to follow the rules stated by every Autonomic Community (in this case the Canary Island Autonomic Community). The fines are not issued because you are “renting your property” but because “you are carrying out a tourist activity without the proper authorisation”.

The Letting Agreement Law is a Civil Law and the Tourism Law is an Administrative Law. This means the first one regulates the disputes between landlord and tenant, while the second one regulates the relationship between the citizen and the State (in this case Canary Autonomic Community).

In other words, the Autonomic Community cannot stop you renting the apartment (because it is your civil right) but instead, can fine you because you’re in breach of the Administrative Law.

There should be a common pattern to all cases in which individuals receive a fine. It normally starts with an inspection, you can give your defence reasons against the allegations, later you will receive a proposal of a fine. Sometimes, before the proposal you can be required to present documents in a reasonable period of time to the authorities. And finally you receive the final resolution with a fine. This resolution can be objected to before the same authority that granted this fine (“reposition”) or appealed before the Economic Court. The resolution of the Economic Court can be appealed at the Administrative Court (which belongs to the Judicial Power and is independent). Bear in mind that, once you are fined (final proposal) you must pay the fine, appeal and later, if you win the case, the monies are refunded.

I have studied some of the ongoing cases. In one of them a rental office was fined for two reasons: 1) not reporting tourist activity to the authority and 2) not attending the requirement (after the inspection the Tourist Board sent him he did not present further documents). Note that the fine imposed by not attending the requirement was higher than the first one. That is why it is very important to attend every requirement made by any authority. In relation to the communication (report) to the Tourist Board, the Tourism Law states that this is an obligation and the lack of report is a serious offence and the fine can be from 1,500 – 30,000 Euro.

In other cases, there were two different fines: (1) not reporting tourist activity to the authority and (2) not having the “complaints sheets” and the “inspection book”. Any tourist related business must have such sheets and books which means that even if you are registered you can be punished for not having such book and sheets.

Taking into account that these cases are based on non-resident owners who stay in the island few months and rent the apartment the rest of the year (if they can find a tenant), the questions and answers are:

Q: Can I rent my apartment?

A: Yes. As owner you have the right to rent your apartment. It is necessary to determine if you are at the same time doing a tourist activity (which is the reason of the fines).

Q: Is it necessary to be registered at the Tourist Board?.

A: If the rental is considered tourist activity you must report to the Tourist Board such activity. In other words if you are included in article 2.b) of Tourism Law which is the case of companies that offer accommodations and the complexes where these activities are offered. According to the Tourism Law there should be only one company allowed to deal with tourist rental agreement in every complex.

Q: What happens in cases in which the landlord does not what to deal with a tourist activity but rent privately his/her property short term?.

A: These owners can deal with rental agreement according to the Letting Contract Law or Civil Code (in these cases, according to Tourism Law, the tenant changes his address).

Although this is my opinion, my advice in cases when you receive an inspection is to contact a lawyer who knows about Administrative Law, attend every requirement (if not you can be punished for not attending it) at least to say that you cannot provide the documents requested, present allegations to the proposal of sanction and finally appeal against the sanction. If you are a company that lets out apartments be sure to fulfil all the obligations stated in the Tourism Law.

I realise that many people are concerned about how these penalties affect tourism, especially if the fined ones are ordinary landlords who do not act as a tourist company. I am just focusing this matter according to the legal point of view and trying to clarify the confusion originated in the difference between a civil law matter and an administrative law matter. I would be glad to hear from you if you have any comment or query.

Mariano Zunino Siri is a lawyer registered in Tenerife Bar Association since 1991. Office in Los Cristianos at Edificio Valdes Center Torre “A”, oficina 1, piso 2º. Phone: 922 79 44 12.

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Posted by on Jan 13 2012. Filed under Legal Matters. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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