What recommendations can you give to those who were renting their housing for tourist stays and to those who want to engage in such activity in the future?
If they applied for a tourist license in the past (whether or not it was formally granted, but was applied for in time and together with all necessary documentation), they can rent their housing for tourist purposes, being able to provide tourist services (such as cleaning the house during the stay, bed linen or towels change, etc.) and accrue VAT only in this latter case (that is, if indeed any tourist service has been provided), all according to the Balearic Islands’ Tourist Law (Regional Regulation) and the VAT Law.
If on the other hand, they did not apply for a tourist license, we are now in full moratorium period and it is not possible to apply for new licenses until August 2018. These properties (which have no license) can only be rented as seasonal rentals and need to fulfill a series of requirements; they cannot be marketed through tourist channels and they cannot provide tourist services (National Regulation,).
In any case, it should be clear that any property may be legally leased by days or/and by weeks. But we need to study the circumstances of each case to see which regime applies (Balearic Islands’ Tourist Law or Law of Urban Rentals/LAU). Every owner has the right to lease his property since the right to property cannot be limited in its exercise.
How is the modification of the Balearic Islands’ Tourist Law, with its new regulation, affecting tourist rental in the Balearic Islands’ real estate market?
It is clear that a new, more systematic regulation needed to be established to avoid fraud and the abuses of the past. But to regulate does not mean banning, but at the moment there has been banning. It could have been done differently. We will need to wait for the zoning (process of dividing land in a municipality into zones) to be determined and the effectiveness of other measures to evaluate the success or the failure of the new rule. But for me, it is clear that many of the changes made are here to stay and I do not believe that a future Government run by another Political Party/ies will cancel it all.
On the other hand, all major European tourist and holiday destinations have the same problems as the Balearic Islands and everywhere it is being regulated, with more or less success, with more or less imagination, but we have to have a regulation from a global market perspective.
It seemed that the Law would be contested before the Constitutional Court by the Government and finally it has not happened. Do you believe that aspects such as the zoning or holiday rentals in multifamily housings will generate more controversy?
Yes, of course, there are aspects of the law that have already been contested in other autonomous communities (where there is also a regional law that regulates the holiday rentals) and have obtained favorable rulings that have annulled articles of the law (for example, the zoning in the Canary Islands, etc.).
Illeslex is a law firm specializing in Real Estate Law and Urban Planning Law with more than 20 years of experience. How has Real Estate Law changed in recent years?
Indeed, the Real Estate Law has changed a lot in recent years. A number of mechanisms and guarantees have been established to make real estate transactions more transparent and to make sure that legal security prevails at all times.
However, is still highly recommended to hire the services of a lawyer because there are still many properties that have not come to the market in recent years and which have important legal problems, which need to be solved before proceeding to its disposal.
Is Mallorca in fashion to invest in?
Mallorca is always fashionable. It is difficult to find a comparable island in the Mediterranean basin taking into considerations its beauty, culture, idiosyncrasy, gastronomy, safety, cosmopolitanism, connectivity, infrastructure, public/private health and the stability of the real estate market (one of the most important in Europe), etc.
It’s been years now, that ‘sustainability’ (environment) is a key concept for our citizens, politicians, economy and tourism. In the future it will be more difficult to come to Mallorca (or it will be more expensive), there will be more demand that offer, a very regulated offer, that will continue making this island a paradise in the South of Europe.
In terms of investment, Majorca has long journey to travel, the next 50 years of this island just started, with new concepts in the tourist, residential, environmental fields, there is much to be done…
How has the profile of your customers developed?
Customers are increasingly demanding, they have important information about the subject that matters to them, and they presuppose that technical knowledge exists, but is not enough. They also need to develop other skills (be more strategic, flexible, proactive and innovative in solving their problems). In addition to internationalization we have to master several languages and, transversely, the laws of their countries.
What kind of advice is a client looking for in a real estate transaction?
Any attorney-client relationship is based on trust. Once the trust has been earned, the client expects professionalism, a detailed study of the legal and tax aspects of operation, security at all stages of the process and to be informed. We try, additionally, that the customer understands what he is doing, the consequences that such operation has for himself and his family from the legal and tax point of view.
How many persons are part of the Illeslex Team?
Illeslex is composed of a multidisciplinary team of 20 persons included in various categories: partners, lawyers, tax consultants, labor consultants, management, office manager, secretaries, and different collaborators (in terms of tourism consulting, business, insurance, etc.).
In any case, the vocation of Illeslex is to offer a portfolio of legal services, that includes many other specialties. What specialties does it include?
We have mentioned that we are trying to provide customers with comprehensive counselling. Therefore, to the aforementioned areas of urban planning and Real Estate Law, we can add the Commercial and Corporate Law, Bankruptcy Law, Private International Law, Economic-Criminal Law, Horizontal Property Law, Liability and Damages, Leases, Administrative Law, Family Law, Tax Law, Startups, Inherence Law, Labor Law, Banking, Litigation, Arbitration and Mediation, Processing of Deeds, Circulation, Medical and Criminal Liability against people.
Illeslex services also include the Compliance. What is it?
Provide our customers, in this case companies, with legal counselling in the implantation and improvement of their systems, preventing the commission of offences at its heart by their companies, executives and employees and facilitating their exemption of criminal liabilities to which they are exposed to.
The recent reforms of the penal code on criminal responsibility of legal entities introduced fundamental news, allowing the companies to exempt themselves from criminal liability, if prior to the commission of the offence effective models for the prevention of crimes (or compliance programs) have implemented.
In the near future any company will not be able to contract with the public administration, have access to bank financing or public subsidies if they don’t have an implemented system, perfectly operational, for the prevention of criminal offences. Therefore, what is done now by virtue will be subsequently be done by necessity, with the consequent opportunity against competition of being prepared and having compliance incorporated in their corporate culture.
Why did you choose to be a lawyer?
More than “why” I would say “for what”. The term Lawyer comes from the Latin expression <<ad auxilium vocatus>> which means “call for aid”. I’ve always had a vocation to help others and I still have it. There is no doubt that nowadays I would study the same profession although I have many other concerns and interests, through which I can help fellow men.
I remember being passionate about movies about trials, I was very interested in politics with capital letters (today unfortunately very vilified, although originally it was the noble art of good society governance), and the idea of helping to create a better and fairest society were all determining factors. My commitment to the weakest, from a civil society, remains one of the pillars of my life.
As an Attorney with years of experience, how do see the profession in the long run? How do new technologies affect the exercise of the legal profession?
Our profession is changing rapidly and it does not mirror the profession that I romantically began to exercise 25 years ago (where, among other things, any kind of publicity or visibility was banned).
The legal profession, like other professions and activities, is suffering the effects of the technological revolution, with large and rapid changes, and it is impossible to adapt at the necessary speed (is a desiderátum), we are doing as much as we possibly can, thinking big, thinking out of the box and trying to be as innovative and technological as possible.
In the future we will have to compete against powerful computers (IBM Watson has already begun to offer low profile legal advice with a very high reliability index), people who want to exercise this profession will have to have great ambition, a high level of sacrifice and do it in a learning society.
Only the stronger law firms will survive, there will be more mergers and concentrations of law firms, and the very provincial specialized law firms will have a chance to compete against the large structures, by price, quality of service and professionalism. Individual or collective shipments (where only costs are shared) will tend to disappear.
Illeslex has already sponsored two editions of the Congress “Wake Up Emotions”, and also collaborates with the classical music festivals of Santanyi and Port de Sóller. What is the law firm pursuing with these actions?
We work not only to meet the needs of customers and make a decent living. We are very aware of our corporate social responsibility and our obligation to give back to society, in different ways, part of what society has provided us with.
For this reason, we believe in investing in culture and actions that promote emotional improvement in people and businesses, is a good way… but there are others actions that can be taken and in the future, we certainly do not rule out collaborating in other society’s activities and events.