Picture the scene…you have rented out your villa for the summer, either by yourself or through a holiday rentals agency, and you get a call saying that some official-looking person has been asking your holiday guests probing questions. Do they know the villa owner personally..? How did they book…? Image their confusion and concern. Not to mention your own worry when a letter arrives stating that unless you have a licence you are letting your property illegally and now face a huge fine.
This situation is becoming more and more real as the island’s government tries to stamp out the illegal letting of properties, which may sound reasonable, especially when many second home purchases have been based on the attractive proposition that the property can be let when not being used by the owners.
The requirement to obtain a commercial holiday letting licence therefore makes sense in that it will help regulate the industry and maintain standards. However, the background to obtaining holiday-let licences remains a contentious and grey area and one which could be potentially damaging to the future of Menorca’s second home market. For example, it appears that only owners of detached villas and fincas – not apartments – that meet the required specification can apply for a licence for commercial holiday lets. For owners of apartments in complexes legally registered for residential use, these cannot be used for holiday-lets other than privately to family and friends.
Menorca’s UK tourism market has been built on self-catering holiday rentals, a market which, alongside hotels, has seen numbers decline dramatically over the past decade, most noticeably during the low season months of April, May and October. Surely, as part of its plans to recapture its lost tourism figures, it is in Menorca’s interest to support the property owners. They in turn can attract, with confidence, those holidaymakers set on self-catering to chose Menorca over other destinations – a sustainable tourism market that is guaranteed to give back to the local economy during each holiday let.
The following report, written by British Honorary Consul Deborah Hellyer, has been sent to Menorca-Live by a current property owner in Menorca to be used as an information and reference source for property owners considering rental opportunities for the 2014 season. It should be noted that this report refers specifically to ‘tourist lets’.
There has been a huge amount of press coverage recently with high hopes followed by disappointment as local government has been asked and beseeched to change the law on private property rentals to holidaymakers and to allow a level playing field for owners to let their properties to visitors. The request from the private sector to open up the letting of property has been a battle for decades and no major changes have ever been made. Owners would like to be able to rent their property without discrimination whether it is a private villa with pool in a holiday urbanisation, a luxury quayside flat, town house or small front line beach apartment. The hotel sector, mostly represented by their association ASHOME, has stood firm and is seemingly against self catering holidays – one might deduce they consider it competition when selling hotel beds. Local government has so far gone along with the views and demands of the ever-powerful hotel sector and no appreciable changes to the tourist laws of the Balearic Islands have been made.
The law under discussion relates to properties that owners and agents wish to let under the heading of ‘tourist lets’ and which therefore include the necessary services. The rental of any type of property that does not include service, is contemplated under the Spanish Tenancy Act. This difference, to provide service or not to provide service, is all-important. For example, a flat or terraced house rented out may not include service, ie no cleaning, laundry changes or villa manager.
There is probably an important lack of understanding by those in the trade as to what the holidaymaker actually does want – getting to know and understand the customer has been an eternal stumbling block and what is colloquially known as a ‘asignatura pendiente’ (a subject yet to be tackled). Over the past few years we have seen some interesting and healthy diversification in the tourist market, with visitors from Scandinavia and even Russia now arriving every week during the peak season (only). Most of these new visitors enjoy the islands excellent hotels but some expressed they would prefer self-catering if offered the opportunity.
The British holidaymaker in Menorca is ‘the old faithful’ and is a very keen self-caterer. Although this market did take a dip some years ago, when times were good and most women were wage earners at work all week, and therefore didn’t chose self-catering but rather what they hoped would be a restful holiday with no cooking or cleaning during their precious time off work. Maybe this position has changed with the economic recession and families, in order to be able to take a holiday abroad every year, are again keen to self cater and control costs.
However, controlling the cost of a holiday actually acts in favour of supporting the local island economy, as families keep house, shop in the supermarkets and markets, hire cars, eat out in restaurants as well as tour around the island discovering its culture and beauty spots. In turn, the owners of the rented properties, who see an income from their investment through letting, plough back the profits on maintenance (pools, gardens, cleaning and laundry) and on improvements to their holiday home. They, too, support the island economy out of season, and while the property is not let during the winter months hpme improvements are made with local businesses and skills employed, such as carpenters, painters and builders etc.
There is also a very well established top end of the market that chooses self-catering in order to enjoy exceptional quality and perfect privacy. There are specialist firms dealing with these quality properties and that successfully package flights with accommodation and service. The income producing, self-catering market is the sector most affected by the lack of ad hoc flights, and the high price of flights to the island. The difficulty in getting to the island is a real impediment to these travelers who wish to book these less commercial quality second homes that are only rented out when the owners are not using them.
The object of the new Law 8/2012 published on 19 July (3528) and that of February 25 13/2011 is to register and regulate the commercialisation of villas / chalets (detached houses) and duplex (semi detached houses) as holiday rental properties. Flats, apartments, terraced houses etc are at present not considered suitable for letting commercially as holiday homes and may not, therefore, be registered.
The requirements for a letting property include the following
- The tenant will have the right to the use of the whole property for a period of time of no more than two months
- The rental of individual rooms is not allowed. A house may not be rented to various clients, each with an individual rental contract, at any one time.
The renter (owner or agent) must guarantee the following
- A regular cleaning service
- The provision of bed linen and equipment, and regular changes
- Correct maintenance of all equipment and installations
- Provision of professional office contact during the working day
- Provision of 24 hour emergency contact
- Properties must be detached houses or semi-detached houses only
- The property must only have a maximum of 6 bedrooms, and room for a maximum of 12 people
- The property must have one bathroom for every three beds in the house
The quality and standards required for renting are published in the ‘Declaración Responsible’ which is a good practice guide that all owners or agents must adhere to. The creation of this good practice manual is the way to obtaining the ‘green light’ from the island’s tourist department, ‘Fundació Destí Menorca’, which states, sets and accepts the standards and the required quality for registration of a house as a holiday rental property.
Documents needed for presentation
“Declaración responsible de inicio de la actividad” (known as DRIAT) to include all the information on the rental property as required by articles 49 of the Law 8/2012. Full information and all forms can be down loaded from the CIME website under the ‘Turism’ section at: www.cime.es
Identification of the owner and/or the person or business making the application for registration. Documents must be presented to the Consell Insular de Menorca CIME, Plaza Biosfera 5, Mahón.
The requirements to register as a letting property are very easy for any foreign owner to comply with. The guidelines put together by CIME are very basic, seemingly drawn up to suit someone who buys a house as an investment to rent only and not a second home. All requirements fall into the most basic of any letting property used by its owner as a second home. There are only two or three items on the list which require noting, such as a coffee percolator is essential whereas a kettle and tea pot are not – but would be a sad omission for any British holidaymaker..! A First Aid kit is essential whereas maybe not all owners have thought about the necessity for this, but a great asset to any letting property and could perhaps include instructions on what to do if someone is unlucky enough to be stung by a jelly fish or eaten alive my mosquitoes. The other interesting requirement is that a supply of loo paper must be available in the house, not just a roll in each bathroom for arrival, but the provision of bath mats is not mentioned. The other valuable plus when seeking a license is a TV with parabolic dish to receive foreign TV. Since we are on the eve of losing our British TV in Spain, I doubt British owners will be able to provide the variety of programmes they have up till now. (See the list of essential requirements below)
Registration costs 300€ plus an administrative tax of 83,60€. The process takes 4 months during which time an inspection of the property will be made.
Menorca’s estate agents must be anxious for change as at present the investment in an apartment or flat with a view to letting it as a holiday rental property is not a viable proposition. It appears there is still confusion about what type of investment may be registered and let, however the requisites for a house or a semi are now much easier to comply with.
One interesting ‘knock on’ effect that the Declaración Responsible should have, will be to uncover moonlighting ‘managers’ who are neither authorised, levy IVA (VAT) or pay tax. There will now be a requirement to name and appoint professional villa managers or agents, who will be on duty during office hours and available 24/7 for emergencies, and therefore probably named in the Declaración Responsable.
In summary, it would appear that the Tourist Department is choosing to neglect the potentially buoyant self-catering holiday market. There is a proven market for all-inclusive hotel holidays and the tour operators and hoteliers have covered this market. There is also a proven successful market for activity holidays in hotels, and holidays in hotels specialising in families with clubs and entertainment for all ages provided, and there is also a growing market for hotels that only accept adults. However, there is also a greater market waiting to discover Menorca – a market that could easily be tempted into visiting out of season, clients who choose not to spend a week with other people in a hotel, but look for privacy and quality time to spend with family and friends in a private holiday home. There is plenty of work to be done, and plenty of scope for innovative thinking. Let’s hope common sense can prevail and a fair and profitable path can be found to take everyone forward, creating a harmonious solution for property owners, independent holidaymakers, the authorities…and Menorca…!
Below are the essential requirements and all properties must provide all the items
- The general quality of maintenance including carpentry, tiling and garden must be good.
- The cleanliness and general hygiene must be good, including cupboards and drawers, and cleaning equipment must be provided.
- Bed linen must be of excellent quality and include sheets, towels, kitchen clothes and table linen. Bath mats do not appear on the list of requirements but British holidaymakers would not know how to manage without.
- Fire extinguishers – with up to date service certificates.
- Exterior: swimming pool with outside shower and sufficient outside lighting
- Identification must be clear and address displayed with house name, number, plot number (as relevant) and street name.
The property must be attractive to the client and must have
- Comfortable furniture in good condition.
- Enough dining table and chairs, sofas and arm chairs, patio chairs and loungers for at least the amount of people the house is registered to hold.
- Correctly Equipped Kitchen: cooker with hob and oven, extractor, fridge / freezer, washing machine and rubbish bucket.
- Kitchen Equipment: coffee percolator (would be kind to provide a kettle, tea pot and toaster for British clients), sugar bowl, juice extractor, minimum 3 different sized frying pans, saucepans of differing sizes, knives, kitchen scissors, fish slice and ladle, tin and bottle openers, chopping boards and trays.
- Dinner service, cutlery and glass – 1.5 per person (ie 6 place setting for every 4 people). Glass to include wine and water glasses.
- First aid kit.
- Bedrooms: minimum of one bedside table with lamp per room, minimum 3 coat hangers per person, bed, mattresses and pillows in good condition, curtains or blinds and shutters or other system to keep out light.
- Bathrooms: wash basin, shower and/or bath, shower curtain or shower cabin, loo paper holder and loo paper, loo brush, bin with lid, bathroom cabinet or shelves, towel rail and at least one plug (could have difficulty here adhering to the requests of the CIME and complying to the safety regulations imposed on electricians where the sockets are less than 1m from the water).
Other items which will give points in favour for registration
- Visible certificate to show pest control: fumigation, insect control and rat control.
- Swimming pool.
- Washing up machine.
- Iron and ironing board.
- Music centre and radio.
- Extra set of towels per person.
- Extra set of bed linen per person.
- Mirrors in all bedrooms.
- Minimum of one means of heating.
- Parabolic TV dish to receive foreign TV.
- Air Con in all or part of the property.
- Laundry room with sink.
- User manual in Spanish, Catalan, English, French Italian and German.
- Book, magazine or website link (if Wifi access) giving information on local contacts: e.g. medical services, petrol stations, chemists, shops and nearby restaurants as well as things to do or see (eg Roqueta or link to the Menorca-Live website).
- Provide an inventory
- Provide a satisfaction questionnaire
- Provide correct recipients for recycling: at least paper, plastic and glass
Apart from the items emphasised, that may need the attention of even the most experienced of letting agents, the list seems uncomplicated and basic. Most second home owners usually strive to provide superior quality properties to let, houses with style and in some cases that provide better accommodation than some holidaymakers have at home – and that should be the goal. Let’s hope that eventually the local governors will see that self-catering is the essence of island economy, and that many owners would like to be included on the register in order to operate ‘above board’, pay income tax on profit, and support the island they have chosen for their second homes.
Based on an article written by British Honorary Consul for Menorca Deborah Hellyer and sent to Menorca-Live by a holiday property owner in Menorca.