After the entry into force of the current Law on Urban Leases on 1 January 1995, "seasonal leases, whether summer or any other" (art. 4 LAU 1994) were regulated in accordance with the specific provisions for leases for use other than as a dwelling, thus granting them a specific regulatory framework, since the previous LAU (1964) had specifically excluded them.

With the current regulation, the commercialisation of seasonal rentals on the Internet is practically prohibited, since any website can be considered a tourist offer channel and, therefore, a holiday rental.

This regulatory framework has been peaceful until the entry into force of the amendments made by the aforementioned Law 4/2013, on measures to make the housing rental market more flexible and promote it, through which article 5 of the LAU was amended to exclude from its scope of application

"e) The temporary transfer of use of the entirety of a furnished and equipped dwelling in conditions of immediate use, marketed or promoted in tourist supply channels and carried out for profit, when it is subject to a specific regime, derived from its sectoral regulations."

However, Article 4 LAU has not been modified, so we have, for very similar cases, a civil regime, which subjects the rental to the LAU, and an administrative regime, for those rentals with special characteristics, which we will call "holiday rentals". Let us see what are the distinguishing features between the two.

The theory: differentiating notes

In accordance with the new paragraph e) of article 5 LAU, in order for a lease to be excluded, it must include the following notes:

1. Transfer of the entire dwelling, furnished and equipped in conditions of immediate use;

2. Marketed or promoted in tourist channels; and

3. Carried out for profit.

However, it establishes an additional condition, which is that this transfer is subject to a specific regime, derived from its sectoral regulations. Therefore, if there is no specific regime, the lease will still be subject to the LAU.

With regard to the sectoral regulations of the Balearic Islands, Law 2/2005, on the commercialisation of tourist stays in dwellings, now repealed, recognised in its explanatory memorandum the proximity between the two types of leases:

"On the other hand, the legal proximity of the tourist stays regulated by this law with the contracting carried out in accordance with the legislation on urban leases is clear. Thus, there is a figure regulated by Law 29/1994 of 24 November 1994, the seasonal lease, which, due to its similarity to tourist stays, could constitute a way of trying to avoid the application of the provisions of this law. However, the tourist stays regulated by this law meet the requirements that the regulations, case law and doctrine have been pointing out in order to determine the existence of a tourist exploitation. Therefore, it is a temporary transfer of the use and enjoyment of the entire dwelling, in exchange for a price, furnished and equipped, in conditions of immediate use, and constitutes an economic activity carried out in a professional manner and with lucrative purposes.

Likewise, (...) when holiday stays in a specific property are also carried out with the concurrence of what, in a generic sense, are known as tourist services, this legal business falls under the scope of application of the law.

Furthermore, a second differentiating criterion from private leases is the fact that the commercialisation is carried out through tourist operators and channels. (...)."

We can therefore see that in 2005 the Balearic legislation already included in a similar way the main distinguishing features between seasonal rental and tourist stays in dwellings.

Balearic tourism regulations: requirements for holiday rentals

Once we have confirmed the existence of a subtle difference between both figures, let's look at the requirements that the Balearic tourism regulations (Law 8/2012, on tourism in the Balearic Islands) establish for a tourist stay in a dwelling to be offered:

WHO (art. 49 LT. Concept):

For the Law on Tourism, companies marketing tourist stays in dwellings are natural or legal persons who market the use of dwellings layout and configuration of a detached or semi-detached single-family dwelling, in principle designed for residential use, provide tourist accommodation services that alternate with the proper and residential use that the dwelling has under the conditions established in this law and its implementing provisions.

WHAT (art. 52 LT. Typology of dwellings):

They must in all cases be single-family detached or semi-detached dwellings, whether on urban or rural land, with a maximum of six bedrooms and twelve beds. They must also have a minimum number of bathrooms of one for every three beds, and comply with the applicable urban planning regulations. Likewise, a declaration of tourist activity must be presented in order to be able to market the dwelling.

Therefore, the tourist marketing of dwellings in multi-family or semi-detached buildings subject to the horizontal property regime is not permitted.

Likewise, it is also not permitted to formalise contracts for rooms or to make users who have formalised different contracts coincide in the same property, which is a clear prohibition to rent for tourism purposes offered on collaborative consumption websites.

HOW (art. 50 LT. Marketing):

Here we see perhaps one of the most relevant changes, as the Tourism Law of the Balearic Islands considers tourist stays to be those marketed (i) by their owner, (ii) through operators or (iii) any of the tourist marketing channels. Therefore, the marketing channel is no longer relevant, because direct marketing by the owner is also tourist marketing.

In addition, the accommodation must offer the following services, as set out in Article 51 LT.

1. Regular cleaning of the accommodation.

2. Bed linen, linen, household goods in general and their replacement.

3. Maintenance of the facilities.

4. Customer service during business hours.

5. 24-hour telephone assistance service for tourists or users of the tourist service provided.

Likewise, the Tourism Law includes a presumption, stating that it will be understood that there is commercialisation of tourist stays in dwellings when it cannot be accredited, in accordance with the applicable regulations, that the contracting carried out is in accordance with the legislation on urban, rustic or other special leases.

In this sense, it should be pointed out that among the obligations foreseen in the LAU for leases for use other than as a dwelling - which applies to seasonal leases - is the obligation to provide a deposit for an amount equivalent to two months' rent, although it is true that in a short-term lease such as the ones in question, this deposit will not be requested, making it difficult to prove that it is not a tourist stay in a dwelling.

INFRINGEMENTS (art. 104 and following LT) AND PENALTIES (art. 109 LT):

With regard to the infringements and penalties applicable in the event of non-compliance with sectorial regulations, the following are considered serious infringements, among others:

Offering or marketing tourist stays in dwellings that do not comply with the requirements or conditions established in the Law and its implementing regulations.

Allowing the offer or marketing of tourist stays in a dwelling that does not comply with the requirements or conditions established in the Law and in the regulations for the development of the offer or marketing of tourist stays.

Therefore, mere advertising is already a punishable activity on the part of the Administration, a fact that undoubtedly affects Internet portals based on collaborative consumption, but whose purpose is essentially tourism.

Infringements classified as serious will be sanctioned with a fine of 4,001 to 40,000 euros; however, it is possible that the inspection will detect additional infringements, which could considerably increase the amount of the sanction.

In practice

In practice, we see how this distinction, which seemed clear on paper when analysing the requirements established in the LAU, is blurred when analysing the sectorial regulations of an autonomous community such as the Balearic Islands. In this sense, the Balearic tourism sector regulations have created a regulatory framework that is perhaps excessively broad, making it difficult for the traditional seasonal rental to survive, since, in practice, almost any temporary rental is likely to be considered a holiday rental and, therefore, be subject to the regime of administrative sanctions provided for in the tourism regulations.

In fact, article 50 of the Balearic tourism regulations establishes a rebuttable presumption of the existence of a tourist exploitation, as long as it has not been possible to prove, in accordance with the regulations, that it is a lease in accordance with the law on urban, rustic or other special leases, so it will be of vital importance to establish from the beginning the evidence that will allow, if necessary, to prove the subjection to another regime.

Although we understand that, especially in autonomous communities that are eminently touristic, such as the Balearic Islands, quality tourism standards must be sought that help their development as a tourist destination, it cannot be allowed that sectorial regulations invade the civil sphere of individuals so blatantly, making practically any individual who rents their home during the summer season, to be considered a "company commercialising tourist stays in homes", practically making it impossible and making illegal (for the purposes of sectorial administrative regulations) an activity that, on many occasions, is not intended to go beyond the private sphere.

Therefore, we cannot say that you can no longer sign the typical seasonal lease, whereby you transfer the property to a third party for a short period of time, as this lease is still expressly regulated in the LAU. However, when renting the property this summer, you should be extremely cautious with regard to both the marketing channel and the form of marketing, as, depending on the circumstances, your seasonal rental may be considered by the public administration as a tourist stay in a property, and you may be fined up to €40,000.