AT FIRST glance, licensing may appear to be just one more imposition of bureaucracy. However, regulations exist because of the negative consequences of past abuse. Put more simply, people can get hurt needlessly. A few minor precautions often avoid injury, and even death in extreme cases. From the owner’s point of view, it is an essential step in order to avoid being found criminally negligent in the event of an accident during the practise of one’s activity. Being found guilty could lead to considerable fines or even a prison term. Who can argue against safety?
While an expense and a nuisance, licensing requirements should come as no surprise in the world that we live in. All legal businesses have overheads. Certification from the proper authorities is part and parcel of running any lawful business activity.
Of course, we all know that these regulations often run rampant. Bureaucracy easily becomes a cancer that spreads rapidly and can get completely out of hand. While this may be a potential danger in the area of holiday lets, we are still at the other extreme of the spectrum. Thousands of property owners have been making money for years with no regulatory control and little or no taxes paid on the income.
Tourist lodgings in general
The law states that only lodgings registered with the local authorities may be commercialised, whether directly by their owners or via tourist agencies. The licensing process covers the following key areas:
• lodging characteristics
• furnishings
• lighting and ventilation
• sanitary facilities
• health and safety
Lodgings fall into two categories: Apartamentos Turísticos (Tourist Apartments) and Moradias Turísticas (Tourist Houses) which foresee operation on a full time basis.
Tourist apartments
As the characteristics below indicate, this solution is not intended for a single, isolated apartment but rather a group or block of apartments let out to holidaymakers. In other words, those falling into a spectrum above an individual flat, yet below an aparthotel.
They are classified between two and five stars in accordance with the quality of accommodation offered. Basic requirements are defined in Decreto Regulamentar nº 34/97 de 17 de Setembro, articles 39º and beyond. Among other prerequisites are the following:
• identification sign
• a manager on the premises
• reception or management office
• posted information
• maintenance/janitorial facilities
Tourist houses
Tourist houses, a single family dwelling made available to holidaymakers, normally follow the same rules and procedures as tourist apartments, which are essentially the same as any hotel or tourist accommodation facility. They are ranked in two categories, 1st and 2nd class, according to appropriate characteristics, with complex licensing and inspection requirements. In short, they are designed to be part and parcel of a full time tourist accommodation business practice. In other words, the owner exchanges a habitation licence, authorising solely private residential use, for a business licence for tourism that is identical to a hotel.
At first glance, this alternative appears appropriate: the house (moradia) is genuinely being used for touristic purposes. However, the problem arises due to the fact that this legislation does not contemplate a property having two concurrent licences: either 1) a habitation licence for private use or 2) a tourist house permit for commercial activity. Given our mixed use model, either the tourists are illegal under a habitation licence or owner usage is forbidden under the tourist permit. “Damned if you do, damned if you don’t.”
An apt solution?
Despite the fact that this full time activity is not appropriate in many cases, this may be one of the few alternatives open to you in several key councils in the Algarve. Following inspections in Almancil last year, Loulé Câmara has dug in its heels, insisting on Moradia Turística licences. Why Loulé failed to adopt alternative Guest House Regulations in 2000/2001, when most other councils did, is a mystery.
With the whole question under formal review, both by the councils in the Algarve as well as at national level through the Direcção Geral de Turismo in Lisbon, change is more than likely in the coming months. Currently, each council is a world unto itself with diverse legislation, different attitudes, divergent solutions (or no answers at all). Needless to say, the powers-that-be will need to push for harmonisation in the regulations and practises that govern identical activities in different câmaras. In councils where few or inadequate solutions exist, options are under review and substantial change is in the wind.
The pressure is on for action. In mid March of 2006, the National Tourist Office held a training session for local câmara officials to help them fully understand current legislation and harmonise interpretations. Community as well as national leaders have gained awareness that this is an issue that can no longer be ignored and needs prompt resolution.
Next: Licensing requirements – presenting a plan
• Dennis Swing Greene is an International Fiscal Consultant for euroFINESCO. Private consultations can be scheduled at our offices in Guia (Albufeira) and Lisbon (Chiado). In the Algarve, call 289 561 333 or in Lisbon, 213 424 210 or e-mail: [email protected], or via the internet at www.eurofinesco.com.
