There are seventeen different regulations in Spain governing the Tourist Rental of tourist accommodations, corresponding to each Autonomous Community. In the case of the Community of Madrid, Article 26.1.21 of the Statute of Autonomy establishes the exclusive competence of this autonomous body for the promotion and planning of tourism within its territorial scope. In other words, the Community of Madrid has exclusive competence for the regulation of rental housing for tourist use (VUT) in its territorial area.
Thus, with the aim of controlling the tendency towards an uncontrolled oversupply of housing for tourist use, which generates situations of encroachment and unfair competition, occurring in a context of globalization of the market in which travel and accommodations are generally carried out through online platforms, the Community of Madrid has regulated this area through Decree 79/2014, of 10 July 2014.
The current regulation establishes the legal regime, the necessary conditions that tourist accommodations must meet in order to exercise the activity and the penalty system for infringements.
Applicable Legal Regime
The provision of tourist rental accommodation services is to be exercised under the rule of unity of exploitation, for a price, in a professional and habitual manner, without the character of a permanent residence. Habituality requires rentals to be for a minimum of three consecutive months per calendar year.Therefore, rentals for a shorter period would be prohibited.
All housing for tourist use must be registered in the Register of Tourism Companies, submitting an affidavit to the competent Directorate-General, including a floor plan of the housing signed by a competent technical expert and endorsed by the corresponding professional association. This requirement is indispensable, as the advertising of the VUT must always include the registration code.
Regarding the requirement of the first occupancy license or certificate of certificate of habitability, this was suppressed by Decree 111/2018, of 26 June 2018,of the Governing Board (The Madrid City Council will require it for those located within the municipality).
The most important requirements to be met
It is possible to rent any type of housing as long as it has at least a kitchen, a bathroom and a bedroom. This includes studio apartments provided they have a maximum of two convertible beds.
The accommodations must be furnished, equipped and ready for immediate use, and have an internet connection.
In the category of tourist apartment, the capacity of each one will be a maximum of two people per bedroom, in addition to two people in convertible beds in the living room, provided that its size and distribution allow it.
It cannot be used for permanent residence purposes, nor can it be rented per room.
The VUT must display the identification plaque at the entrance in a visible location. The price of all the services offered must also be displayed in a visible location at the entrance of each tourist accommodation (the cost of utilities, bed and bath linens and cleaning will be understood to be included).
Penalty system
In the Community of Madrid, the penalty system is governed by Law 1/1999, of 12 March 1999, on Tourism Planning in the Community of Madrid. There are three levels of fines:
Fines of up to 3,000 euros will be imposed for minor infringements, such as deficiencies in the provision of services, functioning and cleaning, lack of plaques or documentation or mandatory public display information, incorrect treatment of the user, the absence of complaint forms or the refusal to deliver them.
A fine of between 3,001 and 30,000 euros will be imposed for the commission of serious infringements, such as the alteration of the minimum requirements, the use of plaques other than those corresponding to the classification, the absence of mandatory services, cleaning or, among others, the failure to provide any of the contracted services, non-compliance with quality standards or non-compliance with the rules relating to reservations and cancellation of bookings.
A fine of between 30,001 and 300,000 euros will be imposed for very serious infringements. Among others, the offer, provision of services and carrying out of activities, without having submitted the affidavit, the refusal or obstruction of inspection activities or the provision of false information or documents.
The magnitude of the fines will be graduated on the basis of the seriousness of the damage caused, the illicit profit obtained, the social significance of the infringement, the prevailing market situation, the economic capacity of the company, the category of the establishment, recidivism and the negative repercussions for the sector.
It should be noted that, in addition to the monetary fine and depending on the seriousness, the activity may be temporarily suspended, the entry in the Register of Tourist Companies may be cancelled and definitive closure may be ordered.
Special Implementation Plan for the use of Housing of the Madrid City Council
Although the regulation of the rental of tourist accommodations is the exclusive competence of the Autonomous Community, the Madrid City Council is already preparing a local regulation that will establish its own conditions for those accommodations located within the municipality. In May 2018, the draft of the Special Implementation Plan for the use of Housing that is expected to be approved next November has already been proposed.
This plan proposes the division of the city into four areas:
- Area 1, corresponding to the City Center District.
- Area 2, comprising the districts of Chamberí, Arganzuela, part of the districts of Salamanca and Retiro and the Argüelles area in the district of Moncloa-Aravaca.
- Area 3, extending to the rest of the central area and the Puerta del Ángel, Príncipe Pío and Chamartín areas.
- Area 4 would cover the rest of the city of Madrid.
Among the measures included in the plan would be the establishment of a census of tourist apartments and the obligation to have a tourist accommodation license for those who rent during more than three months. These licenses will serve to limit the vacation rental activity beyond what is established in the tourist regulations of the Community of Madrid. However, it will mean freedom for rentals of less than 90 days. It also provides for a total ban on changing from residential to tertiary use in areas 1 and 2; a ban on opening any type of tourist accommodation in residential buildings unless it has independent access from the street, or the requirement of a special plan authorized by the city council for changes of use in all the other areas.
Currently, and pending the approval of the new Special Plan, the Governing Board of Madrid maintains the moratorium that included the suspension for one year of the granting of licenses for all types of tourist accommodations (including tourist apartments and housing for tourist use) in buildings currently used for housing in all areas of the Central district: Palacio, Embajadores, Cortes, Justicia, Universidad and Sol, as well as the Palos de Moguer area in the district of Arganzuela, Recoletos and Goya in the district of Salamanca, Trafalgar in the district of Chamberí, and Argüelles in the district of Moncloa-Aravaca.
This moratorium on the granting of licences does not, however, affect the supply of accommodations for less than 3 months in housing that constitutes permanent residence, as these are not regulated as tourist accommodations by regional tourist regulations and do not constitute a business activity.