New regulations force the closure of 95% of Madrid holiday rental properties

The City Council of Madrid has all the votes necessary to start this week its Special Plan for Uses of Lodging - Plan Especial de Usos de Hospedaje (PEUH), whose main objective is to protect the prices of rental housing and the quality of life of residents of Madrid.

The new regulation, which will come into force when it is published in the Official Gazette of the Madrid City Council, has generated a bitter debate during the plenary session between the different political forces and has gone ahead with the votes in favor of the councillors of Ahora Madrid and PSOE and against the councilors of the PP and Citizens.

We previously reported on the proposed regulations in August 2018 when they were initially proposed.  These new regulations including Tourist Zones in Madrid, have now been finalised.

With this PEUH, 95% of the tourist housing offer that currently exists in the capital of Spain, will be totally eliminated due to the strong restrictions and conditions to be met by these accommodations that have been operating for several years with licenses and permits. required so far by both the Community of Madrid - which is responsible for tourism, - and the City of Madrid - which is responsible for town planning - and which, with the PEUH, aims to limit the holiday rental in the centre of the city to the maximum.

A recent survey in El Pais Spanish newspaper indicates that the majority of people do not consider these new regulations to be positive for the city.

Madrid regulations survey results

This Plan is currently in the Courts as it has been appealed by the main holiday rental associations. In any case, and until there is a ruling in this regard, these are the main requirements established by the PEUH to exercise the holiday rental activity, and that rather seem restrictions, are: -

·         The period for which a private individual can rent a home to tourists without the need to register or obtain a license is limited to a maximum of 90 days. If you intend to rent a home for more than 3 months, the activity will be considered collaborative to a commercial activity that will require compliance with certain requirements and procedures.

·         Among the requirements established by the PEUH to the homes that are to be rented for more than 90 days to tourists is the need to make a change from residential to tertiary use and, if the house is in a residential building, which has an entrance from the totally independent street to which neighbours and residents would use. This is where it is practically impossible to rent a holiday because there would be hardly any tourist homes that could meet these requirements.

Map - Madrid zonification for tourist zones

·         Three rings are marked in the city of Madrid based on the concentration of tourist homes: -

o   The first ring coincides with the boundaries of the downtown district.

o   The second comprises the entire Chamberí district and part of the districts of Chamartín, Salamanca, Retiro, Arganzuela and Moncloa-Aravaca.

o   The third expands to neighbourhoods of the previous districts, to which are added other zones of the districts of Tetuán, Usera, Carabanchel and Latina.

The mandatory independent access is established in ring 1 and 2, while in 3 only would be given if there was an express prohibition of commercial use in a residential land.

·       This regulation, although not retroactive, will affect all those tourist homes that are now forced to obtain a license to rent for more than 90 days. As so far in Madrid this permit has not been needed, in practice it affects all those who operate in the capital.

An Inspector Calls...

Following the approval of the new Special Housing Plan, the number of inspectors who will inspect properties to ensure they meet the legal requirements for short term holiday rentals has increased to 22 inspectors.  They are also responsible for processing disciplinary actions.

This includes a total of 10 superior architects, 4 general administration technicians and 8 administrative assistants.

Between August 2018 and February 2019, a total of 11,936 properties were inspected, resulting in the opening of 1,729 disciplinary proceedings, which have resulted in 502 cessation orders.

VVarious associations and employers of vacation rentals have strongly criticized this local regulation and new allegations have been presented. From the PAT (Spanish Association of Digital Temporary Rental Platforms), to which belongs, its president Almudena Ucha has stated that "they do not recognize the legal offer that exists" because "until now it was necessary to register in a registry of the Community, with a responsible declaration, but the plan of the City Council demands of us all a license and penalizes all, also to those who have done things right ".