Balearic Islands Will Force “Large Landholders” to Give up Their Empty Houses

08/08/2017

This measure will not affect owners who have these homes as part of their assets, unless they are active entrepreneurs in the residential real estate market

The government of the Balearic Islands approved an executive order this Friday, modifying its previous executive order on tourist rental accommodations in the Balearic Islands. The intent is to regulate and order the business of renting tourist apartments in the archipelago, an area which has been highly successful in recent years.

One of the main changes is that the regional executive will, by law, oblige the “large holders” of housing – companies, not individuals – to cede them if they have been vacant for two years to relieve existing difficulty of access to social housing, the minister of the Territory, Energy and Mobility informed today.

The law considers that “large holders” are natural and legal entities who, directly or indirectly through corporations, actively participate in the market and who own, rent or have beneficial ownership of ten or more houses. They will be required to develop an economic activity for the dwellings, that is, mere possession will not be enough.

The order will not affect owners who have such housing as part of their holdings, but only active entrepreneurs in the housing market. The law provides for an inspection body, both to detect empty dwellings and irregular uses of public housing and other violations.

The minister stressed that the Balearic Islands Consultative Council has endorsed one of the main measures included in the law: the obligatory temporary reassignment of those properties held by the “large holders.”

The affected entities will receive adequate financial compensation, which also establishes the obligation of the “large holders” to register empty houses in the Register of Unoccupied Homes, where failure to comply will expose the holders to a fine of 3,000 to 30,000 euros.

The law will “protect” citizens so that they can access rentals or continue in their homes in conditions of “dignity”, with essential services.

It also aims to boost social rentals, increasing the supply of public housing for social rental, and to implement controls to avoid fraud in the use of this type of housing. In addition, universal housing accompanying services, free of charge, was created for all citizens.

In addition, it is very possible that in the Balearic capital, legal holiday rentals of primary residences will be limited to a maximum of 2 months, following the example of Amsterdam, while the rentals may be completely banned on the island of Ibiza.

Intended for habitual residence

The function of the housing accompanying service, which will be under the purview of the Balearic Institute of Housing (IBAVI), will be to guide citizens in situations where there is a risk of loss of housing – because they cannot pay rent or the mortgage – and to assist them with any information that they may require in during a purchase, rental or financing of a home, while also helping individuals understand their rights as consumers.

On the other hand, in order to guarantee sufficient social housing (VPOs) in the Balearic Islands, all new developments will be classified as VPOs, where they will not be able to be sold above an established price. This measure will not affect current VPOs.

Finally, the executive order details the conditions of use of official social housing, which has to be used as primary residences.

Official social housing cannot be rented, except in certain specific cases, such as change of address for work, health, family, cases of gender violence, terrorism and other situations that are justified and authorized by the regional administration.

Original Story: ABC / EFE – Palma

Translation: Richard Turner

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