Tag: regulations

Town Hall of Madrid Reorganises 2,500 Hectares of Land in Valdecarros & Los Cerros into Smaller, More Feasible Areas

16 October 2018 – Inmodiario

The Town Hall of Madrid has agreed to submit to public information the Advance documents detailing two Modifications to the General Plan for four areas belonging to the developments in the south-east: Valdecarros-Cantiles de Manzanares, with a surface area of 1,928 hectares, and Los Cerros-Ensanche de San Fernando, with a surface area of 494 hectares. The main objective of these documents is to adjust urban growth to the real needs of the city, establishing a new framework for the economic, social and environmental feasibility of future developments.

Moreover, the documents prioritise the defence of the general interest of the city in two senses:

They ensure the environmental values of certain areas in the aforementioned zones through the classification of the land.

They increase the economic guarantees and legal commitments of the private management and execution, and they ensure the implementation of facilities, services and infrastructure to the real capacities of the public administrations.

The economic and legal guarantees affect the public and private agents. On the one hand, the capacity of private players to carry out the investment necessary to manage and urbanise and, on the other hand, the public capacity to implement services and amenities.

To streamline the use of the land, a new land classification system has been established for these areas, which allows for their gradual planning and development, in smaller sections. In this way, the urban planning documents program smaller execution units to ensure the production of land for homes, economic activities and amenities in timeframes that match the needs of the city. In this way, the future developments may be adapted to social, economic, technological and environmental changes that evolve in the future, and will avoid the execution of urbanisations and the inappropriate or unnecessary regulation of buildings.

The result of the land reclassification is 2,422 buildable hectares (…).

In total, the potential capacity of the land in Los Cerros and Ensanches de San Fernando decreases by 28.45%, from 14,900 to 10,700 in terms of the number of homes, and by 23.70%, from 570,000 m2 to 440,000 m2 in terms of the buildable surface area for economic activities.

The first development is scheduled for 2022 in the north of the region (….).

Original story: Inmodiario 

Translation: Carmel Drake

Town Hall of Madrid Is Building 2,300 of the 4,000 Homes Promised by 2019

14 February 2018 – Madridiario

On Wednesday, the mayor of Madrid, Manuela Carmena, and the delegate for Equality, Social Rights and Employment, Marta Higueras, visited several developments currently under construction by the Municipal Housing and Land Company (‘Empresa Municipal de la Vivienda y el Suelo’ or EMVS) in the districts of Villaverde and Puente de Vallecas (Madrid).

The Town Hall of Madrid, through the ‘Empresa Municipal de la Vivienda y el Suelo’, has 2,356 homes under construction, at different stages, of the 4,000 that it has committed to building in total during this legislature. All of them are destined for rent and represent a change of tack towards “social needs” with respect to the previous PP Government, because “they are not being built to make money”.

That is according to the delegate for Equality, Social Rights and Employment, Marta Higueras, speaking on Wednesday. She detailed that, under the previous regulations, people who can now be awarded homes and who receive income for the entire family unit of between €600 and €700, were previously not allowed to register as applicants for homes (…) as they did not meet the minimum economic requirements.

“Only those that exceeded the IPREM by three times were allowed to register, but we have turned around that social approach because we are not looking to make money (from the process)”, said Higueras, who added that some rents start at as little as €65/month.

Meanwhile, the mayor of Madrid, Manuela Carmena, recalled that the responsibility for housing, both in terms of its construction and provision, lies with the Community of Madrid (regional Government) but, in fact, it is the Town Hall “that is proving to be the first port of call for citizens and that is having to find a solution”. To emphasise this point, Higueras contrasted the more than 2,300 homes that the Town Hall has underway, in different phases of construction, with the 140 homes planned for the capital by the regional executive.

Of those 2,536 homes in different phases of construction, 970 of them have already been started or will be started soon. They are joined by 458 under public tender, which will soon be awarded to the construction company and 212 in the phase of project supervision and licence management. Another 200 are inter-generational homes in the Ecobarrio de Vallecas, which are under tender and 516 are in the internal tender publication process for the drafting of plans.

Original story: Madridiario

Translation: Carmel Drake

MAB Introduces Tougher Entry Rules For New Socimis

31 July 2017 – Expansión

In August, an amendment to the regulations governing the Alternative Investment Market will enter into force, which has led to a wave of Socimi debuts on the stock market in July to circumvent the new requirements.

Six new Socimis debuted on the stock market in July, an unusually high level of activity compared to previous months. The reason is that on 1 August the new circular published by the Alternative Investment Market (MAB) will enter into force. It introduces changes for debuting on the stock market and will affect all companies wanting to list from next month (August) onwards, in particular, Socimis. The amendment sees a toughening up of the conditions to debut on the stock market, given that it imposes some very demanding requirements for minority shareholders.

The change is very specific: “At the time of listing, companies must have minority investors owning shares that are worth less than €2 million or 25% of the company’s share capital”, explained José Luis Palao, Partner of the Mercantile Department at Garrigues. Minority shareholders are considered to be those that hold less than 5% of the share capital. Until now, the regulations allowed companies a grace period of one year to fulfil this requirement.

Manuel López, Partner of Financial Regulatory Law at Ashurst, considers that some Socimis have formed closed-end funds of sorts that have no interest in allowing access to minority shareholders. The exception to the regulations that existed benefitted this type of company in particular, as they enjoyed additional time to adapt themselves.

In this sense, López understands that the regulations are reasonable and reflect what the Socimis are designed to be – entities with the vocation to expand and attract new investors, aimed at boosting the real estate sector. His colleague, Ismael Fernández Antón, Partner of Real Estate Law at the same firm, considers that “the legislation has not become less flexible, but rather more coherent”.

Although Circular 1/2017 does not explain the reasons for the change, the experts agree that the market for Socimis has reached maturity and does not require any further encouragement. The MAB was prudent at the beginning, offering these companies a certain amount of freedom to promote their growth. Fernández Antón says that “this measure was always going to have a sell-by date”, given that the Socimis already represent an attractive vehicle for real estate investment in Spain. Moreover, the modification represents a guarantee to “limit the desire to use them as a platform for pure fiscal optimisation”, says López.

The change only affects companies that start trading from August, in such a way that those that have debuted recently still benefit from the exception. This has meant that, in the last month, the rate of Socimi debuts on the stock market has multiplied. Those who have acted quickly can enjoy a period of one year to fulfil this requirement regarding the diffusion of shareholders.

Although almost 40 Socimis trade on the stock market, only five are listed on the Main Exchange and only two of those form part of the Ibex 35: Merlin Properties and Colonial. Within the last few days, the entities Numulae, Bay Hotels & Leisure and AM Locales have all debuted on the MAB.

Original story: Expansión (by Jesús de las Casas)

Translation: Carmel Drake

Hoteliers At FITUR Stand United Against Airbnb

25 January 2017 – Expansión

Same rules of the game / Directors of several major hotel chains are accusing the collaborative economy platform of unfair competition. They are also demanding more regulation and control by the authorities regarding homes made available for tourist use.

Fitur – the major tourism fair – brought together the main players in the tourism sector once again: airlines, hotel groups, transport companies, tour operators, travel agencies and purchasing centres, amongst others. One group of player, who did not attend but who were omnipresent at all the meetings, were online platforms, such as Airbnb. Even the definition of the collaborative economy was generating controversy.

Sources at Madrid’s Hotel Business Association (AEHM), the capital’s hotel trade association, emphasised that the boom in tourist homes is not only a phenomenon that is affecting cities such as Barcelona, although that city is hitting the headlines the most.

“Madrid has seen spectacular growth, increasing from 10,000 to 20,000 homes in one year and from 37,000 to 74,000 beds, although most of those have not been registered”, said the AEHM’s President, Gabriel García. “It constitutes unfair competition for the sector and it must be addressed”, he said.

Gabriel Escarrer, Vice-President and CEO at Meliá, was equally convinced. “There is a lack of regulation in the poorly-named collaborative economy. Meliá spends almost €18 per room in order to comply with regulations, not just in terms of taxes and licences, but also to comply with specific measures such as fire-proofing, security, occupational health and safety. That generates a disadvantage for us with respect to any individual who decides to rent out their apartment; what’s more, in most cases, those apartments do not have a licence or pay VAT”, he said.

For Escarrer, the person responsible “should not only be the owner of the home, but also parties that include such properties on their websites when they do not have operating licences”.

The Director General at the Palladium Group, Abel Matutes Prats, is aware that “we cannot buck the trends”, but, he emphasises that “it is unfair that there is so much regulation for hoteliers and yet a complete lack of regulation, both fiscal and normative, for everyone else. To illustrate the situation, he says that one segment has five referees watching over it, whilst the other has none”.

Antonio Catalán, President of AC by Marriott expresses the same sentiment. He considers that it is essential that the authorities act.

Sources at Airbnb say that they are not opposed to regulation but rather that they require it to “allow people to share their own homes”, in other words, they want “a single legal framework for individuals, distinct from the one applicable to professionals”. And they add: “The existing framework favours professional operators and harms those middle class people and families who want to open up their habitual residence. The collaborative economy needs clear legislation and Airbnb has always been open to working with cities to identify specific solutions”.

Property conversions

(…). “In many urban centres, residential assets are being converted into tourist properties and many cities are just not ready for the change, from the point of view of infrastructure or services. This results in problems for people living together”, explains Escarrer.

For Catalán, the key resides in “what type of city we want, Paris or Cancun, and what we have to do to achieve it”.

“In Ibiza, a type of tourism-phobia is started to emerge, which is hitting hoteliers. We have fewer rooms there than before. We bring fewer tourists than before, with higher quality but less volume. Why are there more tourists? Because of the collaborative economy. We need specific laws, like in New York, to limit the duration of stays and to require tourist apartments to comply with certain minimum health and safety requirements, and moreover, for tax fraud to be prosecuted”, said Matutes.

Airbnb’s sources reiterate that they are “part of the solution” to the challenges that cities are facing: “Airbnb complements the traditional tourist industry and helps to redistribute economic benefits from tourism amongst citizens, communities and neighbourhoods”.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Landlords Demand Revival Of Express Evictions For Rental Homes

6 December 2016 – Cinco Días

The u-turn made by Mariano Rajoy’s first Government regarding housing policy was accompanied by several draft legislative changes. In this way, in 2012 the Ministry of Development decided to stop financing the construction of subsidised homes (VPO) for ownership, to focus instead on boosting the rental sector (Spain is one of the countries with the lowest percentage of households living in rental properties in Europe) and the renovation of homes.

To this end, in 2013, it undertook a comprehensive reform of the Urban Leasing Law (LAU), which provided for the speeding up of the periods for processing evictions, amongst other things, with the aim of making it possible for owners to recover their homes sooner once judges order tenants to leave properties due to non-payment.

Nevertheless, in the opinion of some operators in the sector, the results, more than three years later, are quite disappointing given that the processes that culminate in the eviction of delinquent tenants are still taking between eight and nine months on average. That is now the main concern for many landlords.

“In a market in which demand clearly exceeds supply, the most urgent thing is to provide more legal security for the owners of homes that are susceptible to being rented out and to implement new incentives that favour both landlords and tenants who fulfil all their obligations”, said David Caraballa, Commercial Director at the brokerage company Alquiler Seguro.

In this sense, that company is demanding three specific measures: the approval of new incentives for leasing in the form of IPRF exemptions; the regulation of tourist rentals; and the creation of specific courts to handle cases involving non-payments and evictions.

In the case of tax incentives, Alquiler Seguro explains that during the last legislature, not only were incentives increased to encourage more owners to lease their properties, but also the fiscal pressures that they have to bear have increased, given that some of the benefits that they used to enjoy (such as from leasing homes to people younger than 35 years old) have disappeared. In this regard, they consider that it is very important that these exemptions be recovered and that progress be made in this vein so that leasing a home is attractive from a tax point of view, like acquiring a property used to be.

The second aspect that requires urgent reform, in Alquiler Seguro’s opinion, is the tourist rental sector. “There is a legal vacuum and a disparity in the rules between those autonomous regions that have decided to introduce regulations, which means that we have clients who admit that it is more profitable for them to rent their properties to tourists than as regular homes”, explained Caraballo. In this sense, the firm is in favour of emulating actions such as the one carried out in New York, where the minimum period for renting a tourist flat has now been set at one month.

In terms of the third aspect, Sergio Lusilla, Managing Partner at Pluslegal Abogados, says that although the timeframes for resolving evictions have been reduced (before the reform of the LAU such cases could take more than two years), the current average of 8-9 months could be reduced to just three with an increase in human resources dedicated to the activity.

“I think that a term of three months would be reasonable for both parties. On the one hand, the owner would recover his home without having to wait as long to put it up for rent again, and, on the other hand, it would give social services sufficient time to analyse the case of the tenant who is unable to pay the rent and take a decision in that regard”, said Lusilla.

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake