FACING UP to the complex licensing legislation affecting holiday rental properties which, to date shows no signs of being altered, one Algarve villa rental agency has launched a service to prepare licence applications for its clients.
Caspo Business, based in Praia do Carvoeiro, has chosen to remove all rental properties from its website until owners obtain the licença de utilização turística needed to make villas and apartments legal for rental to holidaymakers.
With the aim of continuing its business this summer season, the company has decided to encourage its clients to legalise their properties by offering to prepare all the paperwork necessary to obtain the licence. The service is not free and, on average, the company charges between 1,000 and 1,200 euros per property.
Caspo Business has written to all its clients informing them of the situation and, as a result, the company is now dealing with 15 licensing applications for villas located in the Lagoa, Lagos and Albufeira areas. The first applications were submitted to the câmaras over a month ago, no licences have been issued to date.
“It is my feeling that the problem is not necessarily the legislation, although there is a lot of paperwork to complete and the process can be frustrating, it is the fact that villa owners just don’t want to do it,” Cristina Feijó of Caspo Business told The Resident. “Also, it is a fact that some owners want to make money from renting the properties, but are not prepared to spend money on them so that they are in a good, safe condition. There are some properties that should not be rented out as they do not offer value for money for tourists and are not good for the Algarve’s image.
“So far, the majority of the clients, who have asked us to process the licence application on their behalf are German,” she added.
“Once inspections by the Autoridade de Segurança Alimentar e Económica (ASAE), the government inspectorate that controls adherence to this legislation, begin again we expect to receive further requests and more from English and Portuguese owners.
“On average, it takes between two and three months to complete the project to be presented to the câmara for a licença de utilização turística but this is dependant on the size of the property, its condition and if any alterations have been made which need to be changed on the plans and so on. Several visits may be needed before the architect can sign for the property to confirm it meets all requirements.”
With regard to how long it will take to receive the licence from the câmara, “I could not say”, said Cristina.
Hélder Martins, President of the Algarve Tourism Board, told The Resident in January that, in the 13 months since the legislation began being enforced by ASAE, only around 10 villa owners in the whole Algarve region had managed to obtain the necessary licence from their local câmara.
It also emerged last month that a villa owner from Quinta do Lago (see The Resident edition January 12), completed all the required paperwork, but had the licence request refused on the grounds of the resort’s alvara do loteamento (the master planning document submitted when the resort was first developed), as it only allows for properties to be used for habitation purposes and not for tourism use. Meaning that, a licence cannot be obtained unless the resort has its master planning document altered, a move that is extremely unlikely.
Why pay?
In light of this situation, The Resident asked Caspo Business why people should pay the company to apply for a licence that it may not be possible to obtain.
“Our architect and engineers are very experienced and know the legislation and regulations well. They are also used to dealing with the câmara. If a house has no chance of being approved, they will refuse to make the application and the client will be told the situation,” said Cristina.
With regard to properties in a luxury resort like Quinta do Lago, whose properties can only be licensed for habitation purposes, Cristina says that real estate companies need to be honest with potential buyers and make it clear that the property they are buying cannot be rented out legally to tourists.
Caspo Business informed The Resident that it charges 40 per cent up front when the client requests an application to be made. A further 50 per cent is charged when the project is submitted to the câmara and the remaining 10 per cent is payable when the licence is received.
Caspo Business told The Resident that once a licence application is submitted to the câmara, the owner cannot be fined in the interim period. However, when The Resident contacted ASAE to check this detail, a spokesman said: “It makes no difference if you have submitted an application or not. The law states that no-one can rent a property without holding the licence.”
A source from ASAE also told The Resident that although he was not aware of any random inspections being carried out recently, between 50 and 100 complaints had been received from tourists already this year, the majority of whom were English about the unsatisfactory condition of the property they’d rented for their holiday in the Algarve.
“Most of the complaints we have received since January have been about properties located between Quarteira and Lagos and there have been several about properties in the Aljezur area. We have sent our team to visit these properties and check the licences.
The source also said that the current law is not adequate and that it must be changed. “It is impossible for the câmaras to process all the paperwork to licence the large amount of holiday villas in the Algarve,” he said.
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