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ellen

Apartment Rental - New Law
« on: January 13, 2012 »
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  • Hi everyone

    Just before coming out to LG in December, we were looking at various apartment rental websites and lots of them were advising that long term rental of 3 months plus were only available due to new laws regarding private apartments.

    Can someone elaborate please.

    Sorry if this has already been posted

    Offline boadicea

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    Caroline

    Re: Apartment Rental - New Law
    « Reply #2 on: January 13, 2012 »
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  • Hmmmm - the words 'foot', 'shooting', 'oneself', 'in' and 'the' spring to mind.  Sad, sad, sad and such a shame for Los Gigantes and Tenerife.

    There are a lot of people who don't like the regimentation and impersonal aspect of hotels and prefer to embrace the local culture and spend hard earned Euros in the local establishments, thus supporting the local economy. There are not enough Touristic apartments to accommodate all the hotel dislikers.  I'm one of the lucky ones who has a family member with an apartment who doesn't like using it during the hotter summer months and is happy for me to give it an airing - but I really feel for those who don't have that luxury.  They will just go elsewhere and the losers will be the lovely people of Tenerife/Canaries and also owners who were seduced and duped by the words 'good letting potential' when they purchased at probably very high prices.

    When will Government's ever learn???

    Just my two-penneth, for what it's worth.

    Offline janey

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    Re: Apartment Rental - New Law
    « Reply #3 on: January 14, 2012 »
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  • Hmmmm - the words 'foot', 'shooting', 'oneself', 'in' and 'the' spring to mind.  Sad, sad, sad and such a shame for Los Gigantes and Tenerife.

    There are a lot of people who don't like the regimentation and impersonal aspect of hotels and prefer to embrace the local culture and spend hard earned Euros in the local establishments, thus supporting the local economy. There are not enough Touristic apartments to accommodate all the hotel dislikers.  I'm one of the lucky ones who has a family member with an apartment who doesn't like using it during the hotter summer months and is happy for me to give it an airing - but I really feel for those who don't have that luxury.  They will just go elsewhere and the losers will be the lovely people of Tenerife/Canaries and also owners who were seduced and duped by the words 'good letting potential' when they purchased at probably very high prices.

    When will Government's ever learn???

    Just my two-penneth, for what it's worth.
    hear hear!

    but los gigantes is such a freindly place, i am sure many people have lots of friends & family here whom they can take an apartment with....

    Offline Mr Max

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    Re: Apartment Rental - New Law
    « Reply #4 on: January 14, 2012 »
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  • I understand the issues, but it's not necessarily as clear cut as it seems and it doesn't hurt to look at it from all perspectives.

    If your primary source of income is tourism, as is the case in the Canaries, you would want to ensure that your tourism offer meets the standards required by today's tourists. 

    Obviously the hotel industry is reasonably simple to control as is the legal rental market on touristic complexes of which there are many.  Complexes are regularly inspected for safety and are required to provide lifeguards for the pools and receptions/security for tourists to get help if needed and deal with problems.

    Private owners let their apartments out to the public on residential complexes which do not have receptions, lifeguards and more of the requirements.  Whilst generally privately owned apartments may often be very well equipped there is no regulation or inspections, and as happened with Time-Share in the past, it is a sad fact that rogue traders do exist in this world.

    If you ran a business which provided a service, especially to the public, you would insist all your employees worked to the standards you set - after all, it would only take one bad incident to ruin your reputation and trade.

    In terms of the implications of this to private owners who have been letting then the reality is that the law prohibiting the letting of apartments on residential complexes has existed since 1995 and as always in law, ignorance is no excuse.  If you are going to invest a significant sum of money in property, particularly in a foreign country it really is up to you to do the research about local laws and their implications.

    Sadly it is the case that many Estate Agents pushed the sale of property on residential complexes as great opportunities to cover the costs through private letting, and some still are even today.

    Conversly of course, if you were to have bought an apartment on a normally peaceful residential complex, either to winter in, or live in all year round, the last thing you should expect is the complex being used by a succession of tourists on their "jollies" wheeling cases around at 4 in the morning when you have to get up at 6 to go to work. 

    Nonetheless the law is the law and as Orange and others have said before, 18,000 euro fines are busy dropping through letterboxes and a lot of owners (both those who have known about the risks all along, those who have been fined, and some who have been oblivious until recently) - hence the recent withdrawl of apartments on the usual websites.

    As for the potential effect on the Islands, well the bottom line has to be that they made the law in the first instance, and any effects on trade (tourism) are theirs to deal with. Now that the law is being enforced in a major way across all islands any downturn in tourism may result in a change of heart by the lawmakers, although with record numbers of tourists coming here officially, there is little sign of any effect so far.

    So, it's not a new law, it is a 16 year old law, it's their country and if they choose to break it it is their problem.

    Caroline

    Re: Apartment Rental - New Law
    « Reply #5 on: January 14, 2012 »
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  • and loss x

    Offline janey

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    Re: Apartment Rental - New Law
    « Reply #6 on: January 15, 2012 »
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  • reading mr max's very 'black and white' opionion/report on the problem, there may not be any lack of tourists presently, one would assume that all visitors in the resort at the moment, booked many months ago, before this clamp down. 
    the lack of business, will hit home in the normally busy summer months when tourists cant find apartments here so, go to croatia, or greece or turkey.

    that is when the local shops, bars, restaurants will start to close rapidly/feel the pinch which will be reflected in quality and service.

    that is when the people who get up at 6am to go to work, and feel disturbed by suitcases wheeling along corridors, wont need to worry about getting up at 6am as they wont have a job.

    that is when, the beautiful residential complexes dont have community fees paid as the owners who purchased being told they could rent out to help cover such costs, cant afford to pay them, and the complexes cant afford gardeners, communal cleaners etc.

    that is when, the hoteliers (who maybe are pushing for this ridiculous clamp down,) realise that families wont suddenly book into a spanish hotel instead but will  switch from spain.

    sad but true.

    Offline Mr Max

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    Re: Apartment Rental - New Law
    « Reply #7 on: January 15, 2012 »
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  • You could well be right.  One could argue that the Canarian Government is shooting itself in the foot in terms of letting of apartments on Residencial complexes.

    On the other hand of course, you could also argue that the Canarian Government shot itself in the foot some years ago when it allowed hotels to introduce the All Inclusive package and didn't introduce a form of taxation per head to compensate local councils for the drop in revenue from rates, IGIC and so on, as the tour companies bus people to their resort, lock the gates behind them until it is time to bus them back to the airport.

    As of this year First Choice now only offer AI - nothing else.  The reality is that this is likely to be far more damaging to the economy - every week there are 2,500 tourists in the Costa Los Gigantes - how many of these venture outside.

    As far as Los Gigs goes, it stopped being a tourist destination many years ago and there are too many restaurants per resident.  To a great extent it is where foreigners in Spain live - over 75% of the population of the county were shown to be foreigners in the most recent cencus - residents don't go out to eat that much.

    I seem to remember that the reason our illustrious Mayor changed from the nationalist CC party to the conservative PP party (not much difference then!) was because he felt the county was not receiving enough - indeed any, funds from central Government to develop the local infrastructure - specifically in relation to tourism.  Looking forward to the day he realises nothing will change for many years to come, and even now he is having to raise funds by charging for cash-strapped restaurants to put chairs on the pavements.

    Shame really.

    Oh and Janey - the summer months in Los Gigs are normally quiet.
     
    « Last Edit: January 15, 2012 by Mr Max »

    Offline Davymar

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    Re: Apartment Rental - New Law
    « Reply #8 on: January 15, 2012 »
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  • I think Mr Max has made a detailed and fair comparison.
    Several years ago we booked two weeks at Tamara (we had been before) the second day into our holiday, the builders arrived next door at 8 in the morning and used a jack hammer to completely remove all the floor tiles, this was obviously going to continue for days! We contacted our agent (he does not operate anymore) luckily he moved us the same day and we had a great time. If however events like this happen to someone else in the future, it may not have a happy ending, so would also be a deterent to future bookings, especialy if the private unregulated let could do nothing to stop this type of thing happening. Also,some of the illegal lets cannot have proper insurance, public letting liability, so any possible accident to a tourist could have a very detrimental effect on the area ie bad publicity.
    Rest assured though, it is not just the canaries that are tightening up, it is happening all over Europe, the reason I know is because until recently we were involved in tourist accommodation (not in tenerife) it has now become very difficult. My sympathies go out to the people who have bought to let and are now in a very unstable financial position.

    Offline Falstaff

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    Re: Apartment Rental - New Law
    « Reply #9 on: January 16, 2012 »
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  • From a taxation viewpoint I can understand why the government is trying to support legitimate tax registered/tax paying businesses and outlawing private lettings which present the tax man with  major tax gathering problems. The government is legitimately applying the law but it has totally forgotten to consider the more pragmatic law of unintended consequences.

    The Spanish economy has prospered  in recent years principally through tourism and  a property development boom. While tourism in the Canary Islands is holding it's own at the moment mainly due to unrest  in North Africa and Egypt,  there is a major problem looming  within the Spanish banking system caused by foolish mortgage lending including lending  to people to buy holiday homes which were clearly only affordable through illegal lettings. Take away that illegal letting income and you add further problems to an already  depressed property market funded by Spanish banks with major liquidity problems. It is reasonably foreseeable that a large number of  holiday apartments which are no longer affordable without supplementary letting income  will be put on the market through mortgage default, further driving down prices and mortgage income for banks and consequently bank assets held in the form of mortgages.  

    The  relatively small  amount of  revenue raised from fines on illegal letting will be nothing compared to  the financial support which the Spanish Government will need to provide to prevent its banks from failing. Here in the UK , the government has prioritised the housing market and  taken steps to avoid a catastrophic collapse in this market  and the banking system by keeping interest rates artificially low so as to avoid large scale  repossessions and  bank failures.  

    The Canarian Government should learn a lesson and just back off  from implementing this law in the present climate. The legitimate  tourism industry doesn't need protecting at the moment but the property market and the banks do. They need to get their priorities right.
     
    « Last Edit: January 16, 2012 by Falstaff »

    gigs

    Re: Apartment Rental - New Law
    « Reply #10 on: January 16, 2012 »
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  • Very well put, Falstaff. 
    Governments and councils are notoriously blinkered in dealing with one issue whilst totally ignoring the unintended consequences.

    Offline losjack

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    Re: Apartment Rental - New Law
    « Reply #11 on: January 17, 2012 »
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  • Have any owners in the area been fined or warned off? We hear a lot of "friend of a friend" stories but I don't recall reading "it happened to me" in this or any previous scare.

    Offline Mr Max

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    Re: Apartment Rental - New Law
    « Reply #12 on: January 18, 2012 »
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  • No such thing as being warned off it seems.  A fair few fines recorded in the BOC government business roundup from Balcon and El Marques just before Christmas


    Offline janey

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    Re: Apartment Rental - New Law
    « Reply #13 on: January 18, 2012 »
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  • also many places in adeje, los cristianos, playa de las americas, and gran canaria and lanzarote. it isnt only tenerife.

    they are just shooting the canary islands in the foot basically.

    now where is that cruise brochure....??? :-\\

    magsnmike

    Re: Apartment Rental - New Law
    « Reply #14 on: January 18, 2012 »
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  • There are still lots of sites advertising rental accommodation.  Unless you read these types of sites and are aware of what is going on, what on earth will happen to innocent people that turn up to a property they have paid for and believe to be all in order.

    Offline Mr Max

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    Re: Apartment Rental - New Law
    « Reply #15 on: January 18, 2012 »
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  • Simple - nothing.  It is the owners they are after - they cannot evict a tourist although the Cominidad could object to you being there of course since they are arguably breaking the law too.

    Chances are, and think about this carefully, because you as a tenant have no legal safeguards whatsoever, if the owner were to do a runner for whatever reason, you as the holiday maker have no safeguards whatsoever - and chances are you paid in cash ages ago.

    In this respect the law is not entirely daft

    Offline janey

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    Re: Apartment Rental - New Law
    « Reply #16 on: January 19, 2012 »
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  •  :o another thought ...

    surely the owners of the apartments, were once holiday makers themselves...... ;)

    Offline Mr Max

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    Re: Apartment Rental - New Law
    « Reply #17 on: January 19, 2012 »
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  • quite probably, what what point are you making ????????

    Offline cs

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    Re: Apartment Rental - New Law
    « Reply #18 on: January 19, 2012 »
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  • also not really relevant but why do you have to be one or the other, surely you can be both an owner of an apartment and a holiday maker

    Offline janey

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    Re: Apartment Rental - New Law
    « Reply #19 on: January 20, 2012 »
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  • quite probably, what what point are you making ????????

    if you are restricted to only holidaying in a certain way by that country's laws, why oh why look into purchasing an apartment? ie. if you cant book an apartment, and, you like apartment holidays, you are obviously going to book an apartment in a country where you can do your own thing.   

    another unthought through consequence of this law?

    BL

    Re: Apartment Rental - New Law
    « Reply #20 on: January 20, 2012 »
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  • There are plenty of apartments on Tenerife that are available to rent legally....with receptions, fire escapes etc.
    Surely if you enjoy apartment style holidays you would book into one of these apartments......

    Offline Mr Max

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    Re: Apartment Rental - New Law
    « Reply #21 on: January 20, 2012 »
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  • quite probably, what what point are you making ????????

    if you are restricted to only holidaying in a certain way by that country's laws, why oh why look into purchasing an apartment? ie. if you cant book an apartment, and, you like apartment holidays, you are obviously going to book an apartment in a country where you can do your own thing.   

    another unthought through consequence of this law?

    So far all I have tried to do is look at the facts of this from a neutral position, and as time goes on a few more come to light...

    Another consequence of holidaying on the island illegally is the insurance aspect.

    Consider what might happen if any member of a tourists family had an accident or worse on a residential complex - you can bet your life your holiday insurance won't cover you once it is realised that you are staying on the island illegally.  Worse still, the apartment owners who let their (second) homes out for gain are also uninsured agaist damage caused to their property by illegal tourists.

    There are plenty of places to stay on this island, and for those who don't like hotels, plenty of legal apartmnts where insurances will be valid.