property rental licence

[alf1956]

can anybody tell me how to go about obtaining a licence that you have to have by law to rent out your property please? ie the cost , who does it & what does it entail

[widge]

This topic is widely covered in previous posts, here is one such post from me in August 2012,to the best of my knowledge nothing much has changed. Follow up topics include implications of renting without a licence & tax declaration of rental income. Good luck with your application !

Re: Local Lodgment Process.
by widge » Thu Aug 23, 2012 3:05 pm

Here is an overview of what is required (copied from another forum)............

The fees you pay to the camara are €26.00 for the actual application but then a cost per inspection which varies for each local authority (you may need more than one inspection if they find that you dont comply with all their requirements on the first visit) a local council may charge +/- €180 per visit

You need to put together a copy of the habitation licence for the property, copy of the registration certificate (“certidão da Conservatória do Registo Predial”) , copy of the tax certificate (“caderneta predial”), draw a floor plan of the property, and then appoint various technicians to provide a certificate of conformity for electrical, gas and water installations.

(Note that if you have an older house the chance of getting an electrical or gas certificate without having to do any remedial work are very slim).My villa is 16 years old & I had to pay €1000+ to change every electrical socket & €350 for an acoustic certificate & €300 for changes to the gas supply & a gas certificate!

You need to go to the stationery shop and buy a complaints book and find a first aid kit and a smoke alarm in a hardware store.

So this is why so many rental villas aren't licensed, it's expensive & time consuming but....................

If caught renting without a licence the owner can be fined (min €2500) & the rental agency up to ten times this amount!
widge
CVO Legend


Posts: 2014
Joined: Fri Dec 03, 2004 8:02 am
Location: Bristol & Sesmarias

[alf1956]

thank you for the information.my property is 7 years old so maybe i wont need some of the things listed doing like new sockets etc&the gas boiler is not that old either

[widge]

Yes, you should be well placed with a modern property.

Please let us know how you get on.

Good luck......Widge

[widge]

can anybody tell me how to go about obtaining a licence that you have to have by law to rent out your property please? ie the cost , who does it & what does it entail

Thought this very comprehensive description would help all those out there without a licence. The consequences of renting without one are also well covered.

Owning and Letting Holiday Accommodation in Portugal
Information on renting out property for short-term lettings; including rules and regulations, eligibility, how to register and what documentation is required...

Owners of property in Portugal can rent the property for short-term lettings (according to Portuguese bylaw 517/2008 that regulates Decree 39/2008), however the industry is regulated.

Owners must register their properties with the Town Hall (Câmara) as a Local Accommodation Establishment (Estabelecimento de Alojamento Local) and receive a habitation permit.

"Local Accommodation" includes villas and apartments that don't fulfil the requirements necessary to be considered a tourist development, but whose owners provide temporary accommodation in return for payment.

The villas and apartments classified as Alojamento Local must meet the legal requirements for safety and hygiene. Only registered and licensed villas or apartments may be advertised as local accommodation (for short-term rentals or seasonal rentals) by their owners, travel agencies or tourist offices, and they must be advertised as "Alojamento Local" or "AL".

Legal Requirements
The exterior and interior of the building must be well-maintained and in good condition
The premises must be connected to the mains water supply or have a private, controlled water system
The premises must be connected to the mains sewer system or have a septic tank that has the capacity to handle the wastewater created if the property is at maximum capacity
Cold and hot water must be available
The bedrooms must have good ventilation and air circulation provided by a window or other access to the exterior of the building
The premises must have furniture and appropriate equipment and utensils
Windows should have a system for preventing the entry of light
Doors must have locks or a similar system that affords guests privacy
One bathroom must be provided for every three bedrooms, and include a sink, bath or shower with a lock
Guests must be advised of the rules of the property by the operators of the Alojamento Local
An official Complaints Book (Livro de Reclamações) must be kept on the premises and be available at all times
Insurance

All property must be insured. Under legislation, all property requiring a rental license must produce the gas and electricity certificates. Gas inspection certificates must be renewed every five years; house insurance is void for fire or explosion if no current certificate is in place. Should there be a claim and it is deemed by the insurance company that the property is not up to standard, then the likelihood is that there could be a reduction, or refusal, of settlement. Insurance companies recommend that a "Tourist Letting" rider be included on a policy.

Note: Public liability insurance does not necessarily cover paying guests although it does cover non-paying guests. Ensure the proper insurance is in place to cover injury or damage to paying guests and their property.

Hygiene requirements

The guest rooms and linens must be cleaned at least once a week and when a new guest arrives.

Safety requirements

Prior to opening for business, the premises must be equipped with safety equipment. Equipment requirements vary according to the size of the property and number of guests it can accommodate.

The capacity of the property is determined by the number and type of beds at the property. There may not be more convertible beds than regular beds. Removable beds/cots are not limited in quantity.

For facilities accommodating fewer than 50 people (check with the Town Hall for required quantities):

Fire extinguisher
Fire blankets
First aid kit
Manuals for appliances or information about how to use them
A notice clearly indicating the local emergency phone number (Tel: 112)
For facilities accommodating more than 50 persons (check with the Town Hall for required quantities):

Fire extinguishers
Fire blankets
First aid kits
Manuals for appliances or information about how to use them
A notice clearly indicating the local emergency phone number (Tel: 112)
Fire protection measures and a declaration of responsibility by the owner
The following may also be required: (check with the Town Hall)

Smoke alarms
Carbon monoxide detectors
Gas detectors
Within 60 days of application, the Town Hall should inspect the property in order to confirm that the legal requirements are met. If it is determined the property does not meet requirements, guests can no longer be accepted.

How to Register
The following documents are required in order to register as an Alojamento Local:

A completed registration form (available from the local Town Hall)
Proof of ownership of the premises to be registered
The deeds (caderneta predial) filed with the Land Registry (Caderneta)
A valid habitation permit (issued by the Câmara)
Safety declarations issued by qualified technicians that certify that electrical, gas and boiler installations meet legal operating requirements
A floorplan of the accommodation to be licenced (the floorplan may be for the building in its entirety or just the area to be licenced)
After the application has been submitted, a stamped copy is returned to the applicant. Once this process has been completed, the applicant may begin taking bookings for the property.

Advertising
Any advertising of the accommodation must include the letters "AL" or the words "Alojamento Local" after the name. A sign issued by the Câmara must be displayed near the main entrance to the premises.

Complaints
An official Complaints Book (Livro de Reclamações) must be kept on the premises at all times. If a complaint is lodged, the original complaint sheet must be sent to the Food Safety and Economic Authority (Autoridade de Segurança Alimentar e Económica/ASAE), which will investigate the claim.

Contribution by Cathy Taylor, GKE.LDA, Algarve Property Management and Rentals
Edificio Dunas Do Alvor, Loja 23, Alvor, Algarve 8500-084 (Portugal)
Tel: +351 282 458 413 / e-mail / Website
« Landlords & TenantsProperty Jargon »

[alf1956]

thank you for that very comprehensive post about the property licence.i have also had a pm from a very kind fellow cvo memeber that mirrors the above post so a big thank you to all involved.

[shanagarry]

That's a daunting undertaking - I wonder what proportion of rental properties are compliant?

How is it 'policed' and is there any examples of transgressors being successfully prosecuted and what was the outcome?

[widge]

That's a daunting undertaking - I wonder what proportion of rental properties are compliant?

How is it 'policed' and is there any examples of transgressors being successfully prosecuted and what was the outcome?

Recent Algarve Resident article....................

One-third of holiday lets falling under the ‘local lodging’ (alojamento local) regime are operating illegally and fail to comply with the minimum standards of hygiene and safety required by law, said ASAE, the official body responsible for inspecting these accommodation units.

As reported exclusively by the Algarve Resident in March this year, ASAE announced that it would be taking serious action against illegal holiday lets, with heavy fines for those who fail to comply with the law.

Several inspection actions have already taken place in Portugal, with the Algarve being the main target as the region’s thousands of holiday homes are in high demand at this time of the year.

The aim is to clamp down on privately owned apartments and villas that are being let out for holiday purposes without being licensed under the Alojamento Local (Local Lodging) regime.

Last year, a total of 103 inspections took place, with 35 infractions detected. So far this year, 78 holiday accommodation units have been inspected and 26 infractions recorded, meaning that one-third of these rentals are illegal.

But ASAE has warned: “We are only half-way through the summer” and more inspections are expected to take place before the end of the season.

Among the problems detected by ASAE inspectors is the lack of licensing to operate as an ‘alojamento local’ holiday rental unit and the non-compliance with the minimum hygiene and safety standards.

In March, ASAE told the Algarve Resident that inspections of these establishments are both “reactive” and “proactive”, meaning that they can either be carried out according to an annual programme of actions or as a result of investigations, denunciations and complaints.

As per Decree-Law nº39/2008 of March 7, it is mandatory to obtain a licence to rent a private property – villa, apartment and lodging establishment – on a temporary basis and be considered an ‘Alojamento Local’ unit. Municipal authorities are responsible for licensing ‘alojamento local’ establishments.

A list of requirements is stipulated by the law, which these establishments must comply with. “If infraction cases are detected following inspection, ASAE will act in conformity with the law, by opening an investigation procedure against the offender, followed by juridical action,” said the authority.

[shanagarry]

the region’s thousands of holiday homes

Seems like a very small proportion of inspections (103) if the 1000's number is in any way accurate.

What is it that attracts the inspectors to a property? I suspect that anybody using an agency have no choice but to conform - as my understanding is that the agency can also be held liable if they promote/arrange the letting of an unlicensed property. It would appear that those operating on their own - where the address is not identified in the web advert or who let only to friends and family - may be prepared to run the risk. I am not suggesting that those who fall into these categories are unlicensed.

I suspect there will be some reading this who fall into the unlicensed category - who see the bureaucratic process as an expensive and cumbersome matter and take the view that the deterrent is not potent enough to get them to conform. The added complication here is that once a property is licensed - the owners profile appears on the tax authority's radar and the declaration of rental income becomes an unwelcome prospect/cost. I get the impression from the tone of the postings on this matter that those who conform are not averse to revealing the details of the non-conformists to the authorities.

That's an interesting conundrum

[widge]

the region’s thousands of holiday homes

Seems like a very small proportion of inspections (103) if the 1000's number is in any way accurate.

What is it that attracts the inspectors to a property? I suspect that anybody using an agency have no choice but to conform - as my understanding is that the agency can also be held liable if they promote/arrange the letting of an unlicensed property. It would appear that those operating on their own - where the address is not identified in the web advert or who let only to friends and family - may be prepared to run the risk. I am not suggesting that those who fall into these categories are unlicensed.

I suspect there will be some reading this who fall into the unlicensed category - who see the bureaucratic process as an expensive and cumbersome matter and take the view that the deterrent is not potent enough to get them to conform. The added complication here is that once a property is licensed - the owners profile appears on the tax authority's radar and the declaration of rental income becomes an unwelcome prospect/cost. I get the impression from the tone of the postings on this matter that those who conform are not averse to revealing the details of the non-conformists to the authorities.

That's an interesting conundrum

Not sure if you're referring to me or Alf1956 ?

However, your suspicion that agencies conform is probably wide of the mark, I would be reassured if one of them were able to state on the forum that they do ? Let's see if any of them show any interest (assuming any read the forum).

I suspect they shelter illegal villa owners from the regulator & the tax man & in doing so fail to comply with their most basic obligations to their customers. Interestingly, I have written to the MD of my rental agency seeking reassurance on this matter. I see no reason to stay with them if I am forced to compete with illegal villas who don't have the same cost base as myself & who don't meet H&S & insurance obligations. I await his reply & will update if appropriate.

[shanagarry]

Not sure if you're referring to me or Alf1956 ?

Not referring to anybody - I was generalising.

However, your suspicion that agencies conform is probably wide of the mark,

Given that they are prime targets for the 'powers-that-be' I'd be amazed if they ran the risk - but then fee income is king.

[snowbirds]

As posted above."The added complication here is that once a property is licensed - the owners profile appears on the tax authority's radar and the declaration of rental income becomes an unwelcome prospect/cost."

We obtained a rental licence several years ago and have been renting our property legally since then, and this year our 2012 tax return was audited. Our Portuguese accountant told us that the tax authority is being far more aggressive in trying to increase tax revenues, and that owners of rental properties are being targeted. Therefore a higher percentage of tax returns are being audited. There is also a focus on finding companies/individual owners who are renting illegally. Our accountant had all the receipts, took them to the tax office for review - they were satisfied with the documentation and our audit has been completed, with no outstanding tax due. Must say it was stressful waiting for it to be finished, but it was handled quickly and efficiently - about three weeks from start to finish. Has anyone else had the "pleasure" of a Portuguese tax audit?

[shanagarry]

It's not too difficult to see why many choose to forego the 'pleasure'

[widge]

It's not too difficult to see why many choose to forego the 'pleasure'

Agreed but, being in the motor leasing business, imagine how distressed you would be if you discovered that the lease car you had rented was neither insured or MOT'd?

The chances are that you'd never know unless you got stopped by the police or had an accident, then the sh@t would really hit the fan.

The analogy is reasonable as house insurers have made it clear that they will not cover 3rd party claims for paying guests unless the property is legal & the insured has declared their intention to rent for income. This impacts premiums which may be another reason for not declaring until, of course, someone makes a claim.

[shanagarry]

I'm not condoning it - quite the opposite. I liken it to the introduction of the compulsory wearing of seat-belts - it took rigorous enforcement to get people to conform and now its only a small minority that 'know better'. I'm not sure how the Portuguese authorities would go about such enforcement - given that a large proportion of rentals are 'hidden' from their view. The resources to police this are probably diverted to more immediate, easy and lucrative opportunities - motorists.

The insurance issue is an interesting one - given that many insurance companies are claim/payment averse - I would have thought that any insurance claim emanating from the use of a privately owned property - legal or otherwise - would be a minefield. For the insurers the unlicensed is easy (reject the claim out of hand) - which probably means that many properties are not adeuately insured.

In the final analysis - I guess it comes back to the ROI. Does the rental income, allowing for all the ancillary costs - cover the outgoings. If not - its likely the practice of non-declaration of rental income and un-licensed property rental will continue - until it becomes an integral part of the property taxation infrastructure. More bureaucracy........