Are you renting your property to vacationers?
By PEDRO MIGUEL
IN THE previous article, I wrote about the New Urban Rentals Law. It was dedicated to those renting property for permanent living. This article is dedicated to those renting to vacationers, a very common practice in the Algarve and one that is normally in the mind of those who buy an apartment or villa in the region. These rentals are known as “parallel beds” by the bigger and more formal tourism operators (i.e. hotels, guesthouses).
Background – raids on rentals This is the first in a seven part series on licensing requirements for holidaylets.
Background – raids on rentals Tourist lodgings – A casa turística Licensing requirements – presenting a plan The guest house – A hospedagem Renting – o arrendamento urbano Compliance – getting it right Conclusion – not so bad after all In the summer of 2005, Inspectors from the Inspecção-Geral das Actividades Económicas (IGAE) raided rental agencies in the Algarve, demanding to see letting permits. These permits/licences should have been issued by the local council in order for the accommodation to be rented to tourists, as required by law since 1997. Those practising this letting activity were often unaware of any such prerequisites and the inspectors proceeded to fine both agents (between 2,500 and 30,000 euros per infraction) and owners (from 500 to 3,740.90 euros). One agency was fined a total of 150,000 euros. These investigations were part of an overall strategy to tighten up procedures and law enforcement. According to the Direcção Geral de Turismo (Tourism Bureau), approximately 4,000 notifications were sent out to update registries, in addition to parallel inspections like those that occurred in the Almancil area. Throughout the 16 councils of the Algarve– the official entities charged by law to regulate and license the holiday letting practice – one would be hardpressed to count on the fingers of one hand, the licences actually issued since the current legislation came into effect in 1997. Owners and agents now find themselves penalised for not having a licence, which, in many câmaras, does not yet even exist. Given the “Catch 22” nature of the whole affair, confusion and consternation abound. Naturally, these events have brought an upsurge of alarm to the foreign resident community in the Algarve, reminiscent of the shock waves sent out when property reform legislation attacked offshore companies several years ago. Once again, understandable and necessary changes have been brought into place in a rather clumsy and poorly thought out process that rapidly turns intoa nightmare for all concerned.
Commission formed to solve tourist property rental…
Commission formed to solve tourist property rental licensing problems
AS A result of a meeting to discuss the current situation affecting the tourist property rental sector, held last Friday at Vilamoura’s Hotel Ampalius and organised by Portuguese local newspaper, Região Sul, a special commission has now been formed to meet with the government concerning this issue.
151-E Rentals Info as publiced in AFPOP magazine April issue. Rental Licences Recently there have been many press articles on the subject of Letting Licences and many members affected by the issue are in a panic. Because of the lack of coordination between Inspectors, Tourist Office and Câmaras, many owners rightfully fear a Catch 22. Members have asked what to do in their particular area; what the law actually says and how it affects their particular circumstances. Obviously individual situations must be judged on their circumstances, but basically if you earn income from renting out property in Portugal, that property must be licensed. There are different types of licences, based on size, number of rooms and frequency and type of occupation, but all property must be registered with the Câmara and licensed accordingly.
150-E Rental licenses again.
Disappointed but not defeated: property rental licensing row continues
ACCORDING TO those who attended the meeting on March 15 at the Direcção-Geral de Turismo (DGT), the general directorate for tourism, to debate the application of legislation responsible for regulating the licensing of properties for tourism purposes, “it was nothing but a bad joke”.
Dear Rental Algarve client,
**In addition to my earlier letters please find press releases from Algarve News papers indicating that it does not seems to be all good news. **
Dear client,
As promised I will try to keep you up-dated on the situation on the rental issue. We have several indications that the authorities are taken our fight seriously.
Dear property owner,
We have recently informed you about the problem arisen as a result of inspections carried out by the Min. of Economics. Rental agents as well as property owners have been fined, for which reason we had to decide to postpone our rental activities through our agency. The last couple of weeks meetings have taken place at the highest regional level in order to make the authorities aware of the enormous impact these action can have on Algarves economy, nearly totally depending on tourism.Recently during a forum organised by Network the authorities have been questioned about this urgent matter. You will find a report on this meeting below. Furthermore other organisations have asked the authorities to look urgently into this matter and we have been promised that we can expect a first briefing from the council of Presidents of the Algarve early March.
The last year(s) I am confronted, in my capacity as estate agent, more and more with properties asked to promote to sell, which after having studied the paperwork turn out not to be 100% legal or having all the necessary licenses in place.
