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This Article was revised and
updated in December 2009
During 2009 there are at least two major scams in the news involving holidays
rentals. As these would seem to involve deliberate fraud it seems unlikely
that holiday money will be recovered and, at the present time, there has
been no news of arrests.
Holidaymakers in UK, Ireland, France, Germany, Holland, Belgium and Poland
where involved and the total fraud was in excess of 5 million Euros.
There are also other risks associated with DIY rental holidays, that could
involve partial loss of holiday funds or lack of holiday enjoyment and
satisfaction due to (sometimes quite petty) inconvenience, and this article
endeavours to clarify all such risks.
Looking at the holiday rental
risks and how we calibrate them in this article.
Summarising it all: The
safest and most convenient way to book a villa or apartment holiday is
through a tour operator or a bonded villa company - but this could be the
most expensive.
The riskiest way is through a non-bonded company without a credit card
facility e.g. Morairaway
The cheapest way could be to book direct with the owner but
not necessarily in safest way as far as financial security, holiday
satisfaction and convenience are concerned.
Booking through a local licensed rental agency could be the best option but
the article writer admits to be
terribly biased in this respect.
Looking at the different ways to
book your villa holiday.
Assessing the risks - what can
go wrong?
Cost is an important
factor but sometimes the cheapest is not always the best.
Obviously the biggest risk is
fraud involving total loss of holiday rental and sometimes flight
costs as well if alternative accommodation cannot be found at the last
moment.
Something could go wrong that
affects holiday enjoyment and this usually depends on the expertise
of the resort staff. Apart from technical breakdowns it is also important
to consider the resorts staff's arrangements for getting you safely to the
villa on arrival day.
The best made plans can go
wrong and your holiday might not come up to expectations or even be
totally ruined. You may have to resort to litigation in order to
claim compensation, at least have somewhere to complain.
A. Booking directly with the
villa or apartment owner - The most common and amounts to 80% or more of
all holiday rentals.
Cost
- Cheapest but not always so because a lot of owners are out of touch with
market trends. The private owner has an advantage over other sellers
because they are able to employ "casual" local labour to carry out
services and to avoid VAT and other taxes, which a lot of them do.
Risk
of Fraud
- high risk because it is so easy, no authority
controlling the operation and credit cards not normally accepted. Only moderate risk if the renters take commonsense precautions and identify the
owners. All the same, in these difficult times, there have been cases of
bank foreclosures and repossession.
Lack of Holiday Enjoyment
- high risk! The casual helpers are not always able to act
swiftly in order to resolve breakdowns and often do not speak the local
language.
Most owners only have one property, so emergency re-location is not
possible.
Litigation
- unless the property is registered the local
tourist office have no jurisdiction. Generally small claims court judges are lenient
when it comes to awarding damages between private individuals.
B. Booking with a local LICENSED
rental agency - Every region in Spain and most countries have a tourist
authority, which licenses them and registers all of their properties.
Details should be shown on their website and all documentation.
Cost
- is moderate i.e. higher than booking direct with the owner because the
agency has to maintain a public office, pay VAT and other taxes, make
social security contributions and make a profit.
Risk
of Fraud
- almost negligible because the agency is positively identified. It is
possible that the agency could become bankrupt,
probably the tourist authority would appoint a liquidator to ensure that
all contracts were honoured and the villa owners would become creditors of
the failed agency.
No risk at all if paid with a credit card.
Lack of Holiday Enjoyment
- low risk, agencies have access to professional trained staff and, if all
fails they would have another property for relocation.
Litigation
- the tourist authority have an arbitration scheme and all complaints via
the local tourist office are investigated.
The agencies live in dread of a
valid complaint against them and generally do everything to avoid one.
C. Booking with a local
UNLICENSED rental agency - All risks are about the same as booking
directly with the property owner and the cost is considerably higher. Not
recommended unless the holiday is paid with a credit card but even then
there is no protection by the tourist authority.
D. Booking with a tour operator
or a bono fide villa rental company - the all-round safest top end. Also
the most convenient, because they would have a varied range of properties in
many resorts, but certainly not the cheapest option.
Cost
- is usually the highest but then you pay for what you get.
Risk
of Fraud
- low as long as they have a bonding scheme, if you also pay with a credit
card then it's a belt and braces job.
However it should be noted: There is a lot of confusion over the ATOL bond
which only covers a package including air travel. See -
Holiday Bond Protection
Lack of Holiday Enjoyment
- low risk, they would either employ a professional agency or have their
own local organisation.
Litigation
- most use local rental agencies or their own
registered organisation. They also live in dread of a valid complaint against
them in the small claims court.
E. Booking with a DODGY villa
rental company - the quickest and easiest way to lose your holiday
money. The Morairaway Scam is a classic
example. Best to follow one of the recommendations above but, if you are
determined, a least check them out below.
It's not rocket science (or
checking out the dodgy rental deals) -
1. The Documentation:
First: Simply make sure that you know exactly what is included and what you
will get for your money. What services are included and which are extra? Do
they meet you on arrival (sign of a good professional outfit), will there be
a key safe or do they send them through the post?
Do you have complete identity details or the owner (or company) and the
property?
2. Credit Cards: Can you
pay this way? Sometimes this is not the cheapest method of payment but at a
least pay the deposit this way - then you are fairly well there! Obtaining a
card operator's merchant account is not easy and depends on the local bank
manager's references.
PayPal is normally not a solution. Payments are only guaranteed for 45 days
and you would be paying the balance at least 60 days before.
3. Are they who they say they
are? In the case of a private property owner get the name, address and
postcode and check them out with the online telephone directory.
A company may have a VAT registration number but that means nothing. Check
their bond with the bonding outfit or the ATOL website.
Match the website to the name with a
whois lookup. How long have they been around (when was the first
registration)?
Beware of those who try to conceal their true identity by
registering with sites like
DomainsByProxy.
A licensed agency would have registration details and be mentioned on the
town
hall website.
4. Does the property actually
exist? Ask for the Google Map Reference and check that it looks like the
one described.
The laws regarding tourist renting were revised in July
2009.
Rental Property Registration Laws.
Now all properties have to be registered and the registrant and property are
positively identified.
Furthermore, where the renting is "commercialised" (i.e.
advertised). the registration number has to be shown on the ad. together with
the registration of the rental agency (where applicable).
Now this will go a long way towards preventing future Morairaway
Type Frauds because those who register have to prove their identity and,
of course, the property has to exist.
This may not stop the frauds completely but at least the risk of being
identified will be a deterrent.
The problem: Currently none of the villa owners are
complying but most registered agencies, tour operators and villa companies
are rushing to get their properties properly listed. Hopefully, within a few
months compliment will be almost total.
Good advice, even at this early stage: Insist on
knowing the registration details before you book!
İMike King 2009
Author's Bio: Mike King has lived
and worked in Moraira sin 1971. Since 1990 he has run Villa Holiday Services
- a Moraira Rental Agency with the reference: EE-0011-A
Villa Holiday Services is registered as a rental agency with the Delegation
for Tourism of the Sate of Valencia. Mike is a member of the Alicante
Association of Professional Rental Agencies (AEA).
The VHS website is VillaServers
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