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Jail sentences for Oporto gang renting out fictitious properties in the Algarve

villaA gang of property rental scammers based in Oporto have been convicted in Portimão court and given sentences of between 2 years 10 months and 12 years.

The two couples also must pay damages to the injured parties in a scam that involved placing ads on websites displaying rental properties, properties that did not exist or were not for rent, and taking deposits from unsuspecting holidaymakers.

After persuading enquirers by phone or email to send money by bank transfer to book their summer holiday dream house, the money was stolen and the scam complete.

The court convicted one woman on 23 counts of aggravated fraud and handed her a single sentence of 12 years in prison. Her partner was convicted on 23 crimes of simple fraud and got 7 years behind bars.

The man in the second couple involved in the scam was convicted on 8 cases of simple fraud and was given 3 years imprisonment, suspended for three years. His partner was convicted of simple fraud and got 2 years and 10 months in prison, suspended.

In January this year, Ana Mendes Godinho, the new Secretary of State for Tourism said she was to change the Alojamento Local rules as she realised that many are "hard to understand."

Saying the laws “need tweaking,” Godinho aimed to carry out ‘adjustments’ to the current laws which have been ignored by the vast majority of property owners. She has not been heard from since and the central register of rental properties remains of little help to those wanting to check up that a property being offered for rent is indeed registered and does exist.

One Algarve property owner, one of a small number of registered and compliant rental businesses, commented,

“After the third fundamental change in the (2008) Alojamento Local laws, the new secretary of state for tourism said she will soon “modify and simplify the existing 2014 AL law.” So, we can be absolutely sure that every new secretary of state will do exactly the same thing: condemn the work of the predecessor and put their own signature in place. That’s politics, isn’t it!”

Owners have described the Alojamento Local regime as bureaucratic, uninspiring, overly-complicated, obtuse, multi-agency, expensive to comply with, divisive and off-putting.

Rental property income tax evasion on this scale is a huge embarrassment to the government and cases such as the Oporto scammers, and other examples from gangs based in Spain, will continue to take up police and court time. 

IVA, social security and IRS, where due, are evaded by the majority, thus penalising owners who do comply with the laws who carry a heavier financial cost of doing business.

Godinho, like her predecessors, has committed to “a strong regulatory role to combat the informal economy” and was to spend time establishing contacts with ASAE with a view to some “intense action to monitor the informal economy so that the rules will be respected by all those involved.”

This fails to address the fundamental problem. Efforts over the past ten years to force property owners to comply so far have cajoled only 17% of owners to 'go legal.'

There has been no government plan to encourage property owners, only to punish them with increasingly stiff penalties, a strategy that takes up time and resources and is doomed to failure for not understanding the psychology behind such mass rejection of the rules that are not half as tricky as made out to be.

The number of reported cases of criminal activity in the property rental market remains suspiciously low with only around 20 official complaints made last year.

The Oporto gang are not alone in exploiting holidaymakers so many lost deposits are not being reported to police.

Until there is a well supported national register of rental properties, this sort of scam will continue despite the stiff penalties handed out to the 'Oporto four.'


For infomation on how to 'get legal' visit the website of Nalle, 'The voice for local lodging in Portugal'



0 #2 Ed 2016-06-15 08:08
The first comments is a summary of emails received by owners. The second is based on my own analysis of the rules of engagement.
For many the rules are easy to comply with and there is no excuse but greed for not complying.
Others have good grounds for complaint and overall the rules, in my opinion, need simplifying but more importantly people need to be encouraged to comply, rather than bullied into complying. The multi-agency approach was doomed from the start. This is why many say the scheme is 'for foreigners only - the Portuguese will carry on as before.' This may be unfair but the perception is there.
0 #1 Peter Booker 2016-06-15 07:16
"Owners have described the Alojamento Local regime as bureaucratic, uninspiring, overly-complicated, obtuse, multi-agency, expensive to comply with, divisive and off-putting."

"the rules that are not half as tricky as made out to be."

We have two opposite descriptions in the same article. I suspect that the rules are not tricky when you have professional help to understand them, which probably makes them quite expensive to comply with.