The way things are going, opponents of holiday apartment rentals may be happy.


Under the national tenancy act (Ley de Arrendamientos Urbanos), an owner who rents out a property should pay the deposit for the rental into a bank. In the Balearics this means that the deposit goes into the account of Ibavi, the regional government's housing agency.

Although there is an obligation to make these deposits, they are often not made. The government at present lacks the means to force compliance, but under its housing law it will remove this legal vacuum. For non-compliance there will potentially be fines of up to 3,000 euros.

The enforcement of this obligation is coming about principally because payment of a deposit is a stipulation for short-term lets of under thirty days as identified in the holiday rentals' legislation. Another of the requirements is that a tenancy contract has to be signed. Both of these apply to any rental, but the motivation for the government's enforcement is clear enough: it is another deterrent against short-term lets that are camouflaged holiday rentals.

The government's director of housing, Eduard Vila, claims that since the rentals' legislation was passed there has been a fall in the price of rented accommodation and an increase in the level of deposits.