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property management companies
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rental sector
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To Be Legal Or Not That Is The Question
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To Be Legal Or Not That is the Question

Is your Property Management company legal or not? Are you a property owner? Do you care about the status of your management company? If you don’t you should. The authorities are coming…..

Over the last 10 years I have worked with many travel and property management businesses in many countries. In some countries notably Spain these companies fit into two broad camps - Legal ones and illegal ones. First I shall clarify what I mean by legal. I do not mean from a legal accounting and registration point of view, despite the fact that many still work in the “black cash economy”. I refer to the fact that rented properties are increasingly included in legislation and processes which can no longer be ignored.

1. In many locations properties must be registered with various authorities before they can be rented.

2. Community rules must be followed.

3. Properties should meet health and safety requirements

4. In Spain it is a legal requirement that all hotels, property management companies and others renting accommodation provide daily information to the Guardia Civil (Police) for all guests 16 years old or older.

5. Rental properties must include at least one fire extinguisher amongst other things. Do you want to be responsible for a property which was being rented and someone tragically died in a fire. If there was a problem with access or fire extinguishers were not available, you could have more to worry about than an insurance claim.

The Police “hospederia” registration system is very much standard procedure in Hotels and similar accommodation establishments but in the Property Management / Vacation Property rental sector not so, not even by the legal ones. However, this is changing, you can be fined for not being able to provide the information and officers may arrive at your office at any time and demand it.

Don’t fool yourself into thinking the hospederia process is bureaucratic paperwork and the Police are not be bothered, there is an “API” for your web developer to use and the entire process is now online on the Guardia Civil website. At check-in ID must be taken for all guests over the age of 15. Acceptable ID are Passport, Spanish ID document, Driving Licence and Resident Document. Details required for each guest are, Name, Date of birth, Sex, Type of ID, Issue date and from which country.

A new law this year (2012) in the Catalunya region of Spain applies to properties listed on websites. If the website is owned by a Spanish company it can be fined many thousand Euros for listing a non-registered property. Already websites are withdrawing properties which of course affects the online presence and therefore bookings for a property.

Utility providers are now working with Governments so that it can be established if properties are occupied and when. As time passes computer systems are becoming more integrated and it becomes easier for one to exchange information with the other.

It is only in the last couple of years that I have heard of anyone being prosecuted and fined although I am sure it has happened before. The reality of the current economic climate means that existing laws which historically were not enforced are now being enforced to “collect fines” and it is becoming clear that authorities are finding new methods of applying the law so they can collect taxes. The days when Town Halls generated lots of money from local property development are over and they are becoming increasingly creative and diligent in raising money.

There are of course lots of difficulties with some of the above. Unlike hotels many management companies never see their guests never mind inspect ID to collect data. Health and Safety needs paying for and persuading owners to part with money is never simple. Legal management companies have to adapt to new rules and this costs time and money but they still have to compete with the often cheaper illegal operators. One thing that does not seem to happen is authorities closing the illegal ones down.

Slowly but surely it is getting more difficult for properties to be rented illegally. So be careful how you rent your property as those who represent you need to do it correctly and the authorities are coming.


Street Talk

Hi Geoffrey Thank you again for spending the time reading my articles. Regards Rob

Reply
  about 6 years ago

Hi Rob, Thank you for a very rich and informative article.

Reply
  about 6 years ago
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