Illegal Property Letting - The Law Must Change

John Fitzgerald has been holidaying in Lanzarote for 30 years. Back in 2004, he received a small inheritance and decided to invest that money as a deposit on an apartment in Puerto del Carmen. He took out a mortgage with a local bank.

Since then, he and his wife have come here at least twice a year to enjoy their place. They have also worked hard to “sell" Lanzarote back home to people who have in turn rented their apartment and discovered the island for themselves. As independent holiday makers, those people have hired cars, travelled the island, shopped in local supermarkets and generally put money into the island’s economy. Indeed, a few have bought places of their own.

Ruin in Lanzarote

Of course, what John has been doing is completely illegal, because his property doesn’t have a tourist licence, and it’s impossible for him to get one.

So far, it hasn’t been a problem, as nobody on Lanzarote has been prosecuted for illegal letting  - the authorities have turned a blind eye to it, citing the “friends and family" exclusion.

But now there are rumblings – there have been big fines for this practice on other Canary Islands. People in high positions here are talking about the same thing happening soon in Lanzarote.

So what will happen to John?

Will he be slapped with a big fine for his illegal letting?

What happens next? John is a law abiding citizen, he’ll somehow find the money to pay the fine, but then he’ll have to sell the apartment because the mortgage can’t be paid from the savings he’s spent on the fine, and there won’t be any more rental income for him.

The problem the island has to face is that there are literally thousands of “Johns" with properties they have bought here over the last 20 years.

What’s going to happen to the property market here when they all put their apartments and villas on the market?

Do we really believe that all the people coming here to stay in independent properties are going to continue to come here when their choice is limited to hotels and complexes?

What will happen to all the car hire and other businesses that these people support when they come to the island?

How much business will it cost the island to lose all these “sales people" who act as unpaid advocates for Lanzarote, and who will only view it with bitterness in future?

This asinine law has to be changed, and it really isn’t that hard to do:

1/ We need a new class of Tourist licence for privately owned properties.

2/ The standards required should be simple and clear and an annual fee should be charged – this will pay for inspectors to check that the properties meet the standards.

3/ A condition of the licence should be that the IBI and a tax on rental income is paid each year – that will ensure the Ayuntamientos and the revenue get their money.

Have I missed anything?

The only argument against legalising these private lets is the one put up by hotel groups and complex owners, that they are taking business away from them. But they are missing a fundamental point. The people who choose to arrange independent holidays are unlikely to switch to a package holiday, any more than people who choose to go all inclusive are going to suddenly start selecting an independent trip.

It’s dangerous thinking to lump all types of “Tourists" into one bag and assume they all come to Lanzarote for the same reasons.

We need to realise that people come to “their" Lanzarote, and if they can’t have it the way they want it, they will go elsewhere.

Related Information:

Fines issued for illegal holiday rentals


Additional Info