The VUT sector is reeling in Madrid.
Many homeowners are wondering what to do or not to do with their homes, given the latest developments. In order to explain the current situation we summarise some information that may shed some light on what is going on.
ON THE DIFFERENT COMPETENCES SHARED BETWEEN THE CITY COUNCIL AND THE COMMUNITY OF MADRID
The Madrid City Council is responsible for urban planning and business activity licences.
The Community of Madrid is responsible for tourism. The existing denomination for houses that are rented out for tourism on residential land is VIVIENDAS DE USO TURÍSTICO (VUT). In order to register with tourism until now, a responsible declaration was made, a series of documents were handed in and then you were assigned a code beginning with VT followed by a number.
I HAVE A VT-NUMBER ASSIGNED BY TOURISM. SO, DO I HAVE A LICENCE?
Contrary to what many owners think, this number assigned by tourism has never been an activity licence, it is simply a registration that implies being registered in some way and a declaration of intent to comply with the general tourism regulations, such as filling in the passenger police forms, having complaint forms at the consumer’s service, among other requirements.
The Madrid City Council has the authority to issue activity licences.
POSITION OF THE MADRID CITY COUNCIL WITH REGARD TO VUT.
The Madrid City Council has been concerned for some time about the growing rise in housing prices and maintains that the uncontrolled increase in this type of housing is one of the direct causes of the increase in the price of housing, forcing citizens to move to other increasingly peripheral neighbourhoods where they can find housing at affordable prices.
To preserve residential use in the city centre.
Not to overcrowd the city with tourists.
To equalise the conditions of tertiary accommodation use to any other tertiary use such as commercial or offices.
POSITION OF THE COMMUNITY OF MADRID WITH REGARD TO THE VUT.
To regulate this activity, which they consider cannot be prohibited.
Objectives: To improve the current regulations and professionalise this type of activity in order to offer all the guarantees to users, neighbours and owners.
CHRONOLOGY OF THIS 2019. WHAT IS HAPPENING?
06.03.19: Residents’ associations have the power to decide.
Royal Decree-Law 7/2019, of 1st March, on urgent measures in the field of housing and renting.
In addition to what is happening in Madrid you should know that on the 1st of March the government of Pedro Sánchez issued a decree law that came into force on the 6th.
Among other things, tourist accommodation will no longer be governed by the Law on Urban Leases. Communities of neighbours will be allowed to limit or veto the presence of this type of accommodation in a building. However, a qualified majority of three-fifths of the total number of owners (representing three-fifths of the shareholding quotas) will be required, giving them the possibility of increasing the community fees of the properties that rent out this type of accommodation by up to a maximum of 20%.
27.03.19: Madrid City Council prohibition of VUT.
New Special Housing Regulation Plan (PEH).
The city council, which had been considering for a long time to intervene in the matter, supported by its urban planning competences, finds a way to outlaw most of the tourist housing in the centre of the city.
On 27 March, Manuela Carmena managed, with the support of the votes of Ahora Madrid and PSOE, to approve a Special Plan for the Regulation of tourist flats. This special plan for the regulation of tertiary use in its accommodation class (PEH) sets limits that we detail below:
Temporary rentals longer than 90 days per year will need a special licence as it is a commercial activity. In order to obtain this licence for tertiary use of accommodation, it must have, as a distinguishing feature, an independent entrance from any neighbour or share common areas, in addition to meeting the requirements for tourist establishments.
Rentals of less than 90 days per year are considered to be collaborative economy.
The objectives of this plan for the city council:
Preserve residential use in the city centre.
Not to overcrowd the city with tourists.
Equalise the conditions of tertiary accommodation use to any other tertiary use such as commercial or offices.
This plan focuses on different areas of the city of Madrid, with greater restrictions in the more central neighbourhoods. It affects the entire interior of the M30 plus some neighbourhoods in the districts of Usera, Carabanchel and Latina, although it was divided into three areas according to the existing saturation of housing numbers per neighbourhood:
First ring: Sol, Palacio, Cortes, Universidad, Justicia and Embajadores.
Second ring: Argüelles, Gaztambide, Arapiles. Vallehermoso, Ríos Rosas, Trafalgar, Almagro, Castellana, El Viso, Recoletos, Goya, Ibiza, Niño Jesús, Pacifico, Atocha, Palos de Niguer, Acacias, Imperial, Chopera and Delicias.
In the first two rings, all dwellings wishing to obtain a licence must have a separate entrance from the rest of their neighbours (neither use lifts nor share common areas).
Third ring: Casa de Campo, Puerta del Ángel, Cármenes, San Isidro, Opañel, Comillas, Morcardó, Almendrales, Legazpi, Adelfas, Estrella, Fuente del Berro, Guindalera, Prosperidad, Ciudad Jardín, Hispanoamérica, Cuatro Caminos, Ciudad Universitaria, Bellas Vistas, Berrugiete, Castillejos, Nueva España, Valdeacederas, Almenara and Castilla.
Independent access will be required in this area when other tertiary uses are not permitted.
09.04.10: The Community of Madrid approves a new decree on tourist flats.
According to the executive of the Community of Madrid, “the main objective of this decree is to update the current one, improving it and ordering an activity that cannot be prohibited”.
After the previous decree suffered several blows by the courts, and contradicting the new Special Accommodation Plan of the Madrid City Council, only two weeks after its publication, it is considered VUT from the first day that it is rented to tourists and not after 90 days of rental.
According to this the owners of a Vivienda de Uso Turístico must, therefore, register their VUT with the Community of Madrid from the first day it starts to be marketed.
Certificate of Suitability
In a recent meeting we had with tourism, they confirmed that even if a flat is already registered in the tourism register, a new responsible declaration must be made and a Certificate of Suitability (CIVUT), which must be issued by a competent architect or technical architect, must be attached.
This certificate is supposed to “offer security to users, owners and neighbours” as it will certify that the property offered has heating, water supply, ventilation, fire extinguisher, emergency signage and evacuation plan of the building and the property.
More obligations for owners
Some of these measures are aimed at professionalising the sector and guaranteeing minimum quality and guarantees. Some requirements already existed but are reiterated in a special way in the new decree:
To submit to the Police and Guardia Civil information on the identity of the people staying in the accommodation.
Landlords must take out civil liability insurance, have complaint forms, have information with telephone numbers and addresses of emergency and health services in at least two languages.
Owners must inform tourists of their rights, duties and rules of coexistence to avoid misuse of these services.
Square metres per guest
The maximum number of people accommodated is fixed according to the number of useful square metres of the dwelling.
Dwellings of less than 25m2 useful: maximum 2 people.
Between 25-40 useful square metres: up to 4 persons in at least two habitable rooms.
For every additional 10 m2 of usable floor space in at least one more independent living space, two additional persons are allowed.
From this date, 9 April, a period of six months is given to adapt the VUTs to these new regulations.