Not unexpectedly, Madrid is taking a look at the Balearic holiday rentals' legislation. The ministry for economic affairs had in fact advised the Balearic government in May that certain provisions in the law could be unconstitutional. It has three months to decide whether or not to lodge an appeal on the grounds that the legislation invades national law and contradicts European directives.
The ministry specifically referred to potential conflict with law on the operation of the internal market. The Balearic legislation was proposing provisions that would considerably hinder the marketing of certain types of accommodation. The effect, the ministry warned, would be the penalising of these classes of accommodation and the consequent impact in terms of competition and the overall tourism supply.
There was some modification as a result. Madrid had drawn attention to restrictive criteria, such as the supply of utilities to properties. Nevertheless, the law states, inter alia, that in properties for tourist commercialisation there have to be individual water meters registered with local water companies.
The ministry also has issues with the concept of zoning for tourist accommodation places and with licences only being valid for five years. The Balearic government was told to communicate these issues to the European Commission, something which hasn't been done.
If there is an appeal to the Constitutional Court, the legislation will be suspended for five months. At the end of that period, the court will have to decide whether to permanently suspend aspects of the legislation or not.