Common legal mistakes made by holiday rental hosts in Spain

May 2024

What you should legally avoid when managing a holiday rental

Many hosts make legal mistakes when starting their commercial activity. Usually, it’s due to ignorance, affecting both newcomers and experienced hosts alike. Here we’ll discuss the most common mistakes regarding holiday rentals and also see how to avoid them.

To start, is there a single holiday rental law? No, actually, each autonomous community has its own rules. So, it’s important to check those of your region. Avoid holiday rental illegalities at all costs; they will only harm you economically, and the fines for infractions are not exactly low.

What laws must be complied with in holiday rentals?

If you want to comply with the legal requirements of holiday rentals, you just need to check the requirements requested by your autonomous community. By establishing an autonomous statute, each autonomy is allowed to regulate its own rules according to the territory. Therefore, the laws are not centralized.

For example, Andalusia is governed by Decree 28/2016 of February 2, on Tourist Homes. While Castilla y León does so through Decree 3/2017, of February 16, which regulates accommodations only in this community.

The common requirement is to register your home as a holiday rental and pay your bills to the Tax Office. From here, it will vary from one community to another. You can go to your town hall to request more detailed information about this regulation. So, before advertising your holiday home, we recommend you have everything legally settled.

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Common Legal Mistakes in Holiday Rentals

Not making a contract with your guests

One of the most common legal mistakes in holiday rentals is this. Sometimes they are not made for convenience or to avoid bothering guests. However, in some communities like Andalusia, it’s mandatory. The contract includes the rules and obligations in the relationship between host and guest, as well as the consequences of breaking these rules. The holiday contract is a legal document to which you can add valuable information such as the final price or house rules.

Not keeping a record of rental income and expenses

As a good entrepreneur, you should keep track of the expenses and income generated by your holiday rental. Not only to check the profits it generates or control if there are losses but also to verify how the business evolves. And just like in any business, you have to keep accounts here too. Only then will you know how much total profit you get by subtracting your income from the tax obligations of the property.

Not asking guests for identification

You should always ask guests for ID. We advise against hosting anyone in your holiday home without documentation. If any problem arises, you won’t be able to claim to anyone since you won’t have the guest’s data or know who they really are. Request the guest’s ID, at the latest, upon entering the property. Or at least, their driver’s license. Holidu advises against hosting anyone without documentation, even if the reservation is confirmed.

Renting a holiday apartment without a tourist license

This is a serious problem, as it can lead to fines for your holiday rental. It’s not worth taking the risk; the penalties are increasing, and by paying the license, you will gain peace of mind. Currently, any holiday rental portal requires this license to advertise your property. Plus, the advantage is that you pay for the time you have allocated the property for rent. That is, for the days it has been occupied.

Not keeping tenant data

This not only serves to cover yourself if you realize that something is not right after a few days. Whether because you discover damages to furniture or some broken appliance. Also, this information will also be useful for creating statistics and maintaining a file of your customers. This file will be useful for checking if they return, and you can even reward their loyalty. But for that, you need to save their data beforehand.

Consequences of illegally renting your holiday home

We have already mentioned that you must comply with the regulations to engage in holiday rental. Remember that you can be fined heavily for this malpractice. Simply by failing to comply with the regulations of the autonomous communities, you can receive a fine ranging from 2000 to 150,000 euros. The amount varies depending on the seriousness of the offence.

Holidu recommends that before renting out the property, you register it so you can start your business activity. On the other hand, you must declare all the income generated by renting out your holiday home because if you don’t, you could end up paying about 25% of the total that you haven’t declared.

So, what happens if you break the rental law? Well, you can receive a significant fine at any time. Plus, as the number of holiday homes has increased, so has the number of inspectors whose job is to monitor homes that comply and do not comply with regional regulations.

Strategies to keep your accounting up to date

Finally, here we propose a plan to keep the accounting of your holiday home up to date. You don’t need to be an expert to follow these basic rules. The most important ones are as follows:

• Use applications or websites to manage your holiday home accounting.
• Don’t throw away invoices; they are essential for accounting.
• Separate the expenses and profits account of your holiday home from your personal account.
• Create a database with information about suppliers and guests.
• Mark on the calendar the dates of all economic activities related to the house.
• Reserve a deposit for unforeseen events, just like in any business.
• Make a general balance of total profits and losses.

Fortunately, nowadays, you not only have effective tools available on the Internet, but also physical and online companies that can help you manage the accounting of your holiday rental. And even more so if, instead of one, you have several apartments advertised on the holiday rental website.

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