Disappointed but not defeated: property rental licensing row continues
ACCORDING TO those who attended the meeting on March 15 at the Direcção-Geral de Turismo (DGT), the general directorate for tourism, to debate the application of legislation responsible for regulating the licensing of properties for tourism purposes, “it was nothing but a bad joke”.
More than 100 people related to the tourism sector travelled to Lisbon from as far as the Azores and the Algarve, hoping to be given explanations and discuss solutions to make some sense of the legislation that is widely believed to be unworkable. Instead, it appears the audience was given a “patronising sermon” by senior DGT executives, who merely lectured on the law.
The Resident is aware that the President of Albufeira Câmara, Desidério Silva, the President of the Algarve Tourism Board, Hélder Martins, and the President of the Associação Empresarial de Almancil (AEA), Aníbal Moreno, attended the meeting, representing the Algarve, among others.
According to Aníbal Moreno, by the end of the meeting, the attendees began making sarcastic comments and “joking with the DGT officials”, incredulous at their clear refusal to study the situation or consider solutions to a problem that is posing a serious threat to the Algarve tourism industry. “Following this meeting, it was quite clear to us that we are not going to get anywhere with the DGT. They do not understand the problems we are facing and, worse still, do not appear interested,” Aníbal Moreno told The Resident’s Caroline Cunha. “We will not give up though. What we must do now is work on influencing the government because the legislation has to be changed.”
On receiving news of the failed DGT meeting, a source from the organisation known as STARS, a self-formed group made up of over 50 owners of apartments, villas, townhouses and private rooms in the Algarve, have declared their outrage: “The DGT is very immature, irresponsible and hypocritical. Why don’t they give this subject the attention and time it deserves?”
The controversial property licensing legislation has barely been out of the headlines in recent months (see related articles in January 20, March 3 and March 17 editions of The Resident) due to the outrage among the tourism sector at the fines being handed down by government watchdog, Inspecção Geral das Actividades Económicas (IGAE), the general inspectorate for economic activities, for non compliance. Much anger and frustration exists among villa owners and rental operators as, in practice, it has been found that it is virtually impossible to obtain the licence required due to the inability shown by local câmaras to process the related paperwork.
AEA lobbies MPs
On the same day the doomed meeting took place at the DGT, Aníbal Moreno, together with staff from the AEA and several of its members, presented their case to the Parliamentary Subcommission for Tourism at the Assembleia da República building in Lisbon. “Seven MPs attended the meeting, some socialists and some social democrats. Although the group was very tough initially and their first reaction was one of scepticism, once they had heard all the details, they began to understand the full situation and we felt we had their support,” said Moreno.
Villa owners want best for the industry
The AEA made it very clear to the Subcommission that it believes properties rented for tourism purposes must be regulated in order to ensure quality accommodation is offered, and for clients to receive a service in line with their expectations. It also stated that regulation is essential for the credibility of Portugal’s tourism and to ensure it remains competitive in the marketplace. However, it told the Parliamentary Subcommission that the current licensing system is failing and needs to be urgently changed.
The AEA also asked for the enforcing of the current legislation to be immediately suspended until the law is simplified and for any fines to be waived. It says the fines are unjust as is it not possible to obtain the necessary licence from the câmara. The Almancil business association also asked for a reasonable timeframe to be given for owners to comply with the law.
One of the AEA’s key solutions to the present problem is to simplify the licensing process. It proposes that, as all homes need a habitation licence to be issued by the câmara, a licence for tourism use could be processed quickly and easily if it is linked to the same process.
Rather than a whole file of separate application forms and paperwork being processed, the AEA proposes that an addendum consisting of just one or two pages be added to the initial Ficha Técnica (application document) and that the responsibility for the property being authorised for tourism use should fall to the same architects and engineers who examine the property for habitation purposes. This would eliminate the need for separate inspection panels and time consuming paperwork, speeding up the whole process and avoiding unnecessary bureaucracy. “If we clarify the requirements for tourism purposes and put the simple addendum into force, we could have the problem solved in one year,” said Moreno.
Negative media risk
The AEA also took the opportunity to warn MPs of the devastating effects on employment and the economy if villa agencies across the Algarve go out of business due to the fines. It also warned of the media threat to Portugal’s reputation, alerting them to the fact that the international press could pick up on what is clearly a negative situation for the tourism industry. No one could deny that the adverse publicity, a couple of years ago, concerning the offshore scandal had on the real estate industry and the AEA seeks to avoid a similar fate befalling the precious Algarve tourism industry.
AEA sends presentation to the President of
A copy of the presentation from the meeting has been sent by the AEA to the new President of the Republic, Cavaco Silva, as well as to Prime Minister José Sócrates and senior members of the government. “We are working hard to spread the word among all those in positions of power, locally and nationally, to intervene in order to have this problem solved,” said Aníbal Moreno. He also told The Resident that he hopes to have a meeting very soon with the president of the Socialist Party in the Algarve, Miguel Freitas.
Change in law, not just an extension to deadline
The Resident also spoke to Elidérico Viegas, president of the Associação dos Hotéis e Empreendimentos Turísticos do Algarve, the Algarve hotels and resorts association, for his reaction following the DGT meeting last week. “Sadly, the government is not contributing positively to the tourism industry or the economy by applying this legislation. The current situation is totally unacceptable. Also, even if eventually the DGT agrees to extend the deadline for complying with the law, which according to media reports they are considering, this won’t help because the licensing criteria needs to be changed. We just need a total change in the law not an extension. I will be bringing up this subject at my next meeting with the Secretary of State for Tourism, Bernardo Trindade,” he said.
Just as The Resident was going to press, we received a report on the latest meeting held by the Parliamentary Subcommission for Tourism that took place on Tuesday morning of this week.
Social Democrat MP for the Algarve and President of the Subcommission, José Mendes Bota, told The Resident: “The Subcommission held a follow-up meeting this morning to discuss last Wednesday’s meeting with the Almancil business association and, unfortunately, the Socialist MPs appear to have closed their minds to the problem again, so we have not made the progress that we hoped last week. It appears they are out of touch with the reality on the ground.
“The only way forward now is to submit a formal request for the Secretary of State for Tourism to appear before the Subcommission so that this problem can be discussed,” says Bota. He was insistent that the present legislation must be changed: “The AEA came up with some good proposals that must be considered. If we don’t do anything, it could take 10 years for the câmaras to legalise the 80,000 or so properties that need a tourism licence. It is nonsense that eight people from six different entities need to be involved in the inspections that make up the process.”
Agencies fear for their livelihoods
The longer the row over the legislation continues without any solution to the administration problem, the more concerned the villa rental agencies are becoming over their livelihoods. One agency owner in Carvoeiro, who asked not to be named, told The Resident this week that, “rather than looking forward to the start of the holiday season, I am scouring the jobs pages. I really don’t know if I will have a business left soon”.
“Many villa owners are considering selling up because they are having trouble in obtaining the licence from Lagoa Câmara,” she said. “And, if everyone takes their villas off my books for fear of not having the necessary paperwork, I’ll have no income.”
She continued: “I feel really unhappy at the moment, I have a legal business, I rent quality accommodation and I pay my taxes. I think that despite doing my best to promote the country I am living in, I am being unfairly penalised.”
Another villa rental agency owner in the Carvoeiro area, who also asked not to be named, told The Resident: “Everyone is getting jumpy in this area because of all the fines given to agencies in the Almancil area. My agency is trying to comply with the legislation but, even though we have submitted several applications for new licences, to date there has been no reaction from Lagoa Câmara. We have the original licences for the properties we received from the DGT, but as the legislation now requires a fire safety report to be included, we are applying for new licences,” he confided.
“I don’t think there is any way the council can cope with the influx of requests and even though it is an arduous task, I think it is better to be safe than sorry. Even if the law changes in another year, it doesn’t matter,” he said. “I want to be able to prove that I am following the law so that I can’t be fined.”