Renting Privately MJS wrote:
"Having read the posts with interest, I however understand that legislation is very clear on this subject; it does not allow renting out privately. You might want to check with your lawyer and quote the following paragraph, which basically says that the management company has this exclusive right."
MJS, I showed my solicitor your post and got him to repeat what he had already told me twice before. He wrote:
"The reply is the same as usual.
You cannot assign the property to an agent which will compete with the
resort's entity, however, you'll be able to let the property out personally."
Besides my earlier comments, I understand that further legal amendments are in the late stages of approval, supporting my arguments further ....
I would wonder however, how you and your lawyer would see the practical terms of your/his assumptions....
I understand that the resort in question is a closed condominium, which I then suppose has a gated security? As soon as a person shows up at the entrance without a reservation (of the specific management company) I would assume they would not be granted access to the resort?
For the sake of argument, if you were able to sneak your guests in, I would just dread the possible consequences on the subject of their safety. Would they check in and follow the legally required police registration? I would suppose not, as they have no reservation with the management company. Then, when having for instance a fire, your guests would not be accounted for, with possibly far stretching consequences for you!
Even more, any tourist property in Portugal will receive a specific license from Turismo de Portugal. Following this (with the established star classification),a management company needs to adhere to particular operating criteria and standards; e.g. an established frequency of changing the linen. How would you, when intending to rent out privately, go about this? Any non-authorised housekeeping staff will be denied access to the resort. You would not be able to adhere to the star classification attributed. Would you want to put this license and your investment (and of all others) at risk?
Another practical issue. Would your guests have access to bar, restaurant, reception and other on-site facilities? Are these private property or public area? In case it is the latter, they might be denied access to all, which would not create the intended 5-star holiday experience for your guests. Also, the management company would not have any responsibility of needing to deal with their queries or possible complaints.
Furthermore, I understand from my solicitor in Portugal, in case a management company suspects private renting, it is obliged by law to notify the Portuguese Tax Office, who then will levy penalties against the respective owner renting out privately.
In all fairness, in case you want the management company to market your property in your best interest, should it not be entitled to the rental returns? Marketing and Sales expenses for their rental operation are undoubtedly tied to a particular percentage of their total annual operating budget. If it cannot forecast its rental returns, will this not have consequences for their marketing investments and your rental results......?
Consequentely, I would suppose you might want to inform the management company of any rental leads you might have, so adding to your rental share.
Why not sit down with the management company and see how you can help each other? Most of us have private companies or have senior positions in corporations with websites, newsletters, promotional material, staff incentives, emagazines etc, which can all feature the resort, while possibly having access to local media and journalists, facilitating the desired exposure and positioning in key markets. This will work in both your interest.
Hope this helps.
