Administrative law for businesses and commercial activities

In the Balearic Islands, activities are governed by Law 7/2013 of 26 November on the legal regime for the installation, access to and exercise of activities, which has been amended several times, and in Palma the planning rules and the municipal ordinances on activities, noise and occupation of public highways also apply. The Law classifies permanent activities as major, minor or harmless according to their risk, and that classification determines the required authorisation: as a general rule, higher-risk activities require a licence, while minor and harmless ones are processed by prior notification or responsible declaration, sometimes with a technical project.

A bar or restaurant usually requires a project or technical report from a qualified technician; a planning compatibility report for the premises; compliance with the Technical Building Code (fire safety and accessibility); smoke extraction and ventilation; sound insulation (and, if there is music, an acoustic study and a limiter); health registration of the food business; civil liability insurance where the rules require it; and, if works are carried out, a licence or prior notification of works. If you want a terrace, you also need an authorisation to occupy the public highway.

Before renting or buying the premises, you should check that the activity you wish to carry on is compatible with the use of the building and with the area, and what authorisation the premises already hold. A mistake at this stage can cost months and a great deal of money.

A licence is a prior authorisation: you cannot begin the activity until the authorities expressly grant it after checking the documents. A responsible declaration (declaración responsable), by contrast, is a document in which the holder states, on their own responsibility, that they meet the legal requirements, hold the documents proving this and undertake to maintain compliance. Prior notification (comunicación previa) is a closely related concept: the authorities are informed of a fact, for example the start of works or an installation.

With a responsible declaration, the activity may begin once it has been filed in full, but this speed has a downside: the authorities may subsequently check what has been declared and, if they find inaccuracies, falsehoods or essential omissions, they may declare the declaration ineffective, order the activity to cease and impose penalties. It is not, therefore, a risk-free step: what is declared must be backed by genuine technical certificates and documents.

In the Balearic Islands, as a general rule, Law 7/2013 reserves the licence for higher-risk permanent activities and uses the responsible declaration and prior notification for the others. The choice therefore does not depend on the business owner's preference, but on the classification of the activity.

There is no single time limit: it depends on the type of activity, whether works are involved, the technical complexity and the workload of the municipal department. As a general rule, an activity that requires only a responsible declaration or prior notification may begin once the complete documents have been filed and the fees paid, without waiting for a decision. By contrast, a licence with a technical project, sectoral reports (fire, health, environment, heritage) and prior works may take several months, and requests to remedy defects interrupt the running of time.

The maximum period for a decision and the effect of administrative silence depend on each procedure and should be checked before starting. In any event, it is unwise to open on the assumption that silence has already granted the licence: powers contrary to planning rules can never be acquired through silence, and if the licence is ultimately refused, the business will have operated without a valid title.

To save time, the most effective approach is to file a complete, well-documented application from the start, to obtain the planning compatibility report first and to coordinate the works with the application. If the Town Council delays without justification, there are ways of complaining, such as a request for an express decision and, where appropriate, a prior complaint and a judicial review action for inactivity.

Carrying on an activity without the required authorisation (licence, responsible declaration or prior notification) is an administrative offence which Law 7/2013 penalises as serious or very serious depending on the circumstances (for example, the risk, the capacity or the type of activity), with fines that may be substantial. In addition, the Town Council may order the immediate cessation of the activity, seal the premises and impose periodic penalty payments in the event of non-compliance.

There are other practical consequences: the insurance may not cover incidents occurring on premises without a valid title; permanent utility supplies and other authorisations (health, terrace or music) cannot be obtained; and on a business transfer or sale the defect reduces the value of the business and may give rise to claims. If there is an accident, the lack of a licence aggravates the holder's liability.

If you have already opened without a title, or with a defective one, it is advisable to regularise the position as soon as possible: apply for legalisation, adopt corrective measures and, if proceedings are open, submit representations and consider acknowledging liability in order to obtain the reductions in the penalty provided for by Law 39/2015. Acting before the inspection arrives is usually far cheaper than waiting for the closure order.

The first thing is to remain calm and cooperate: inspectors have the power to check the premises, and obstructing their work may constitute an offence. Ask them to identify themselves, accompany them during the visit and, if possible, have a representative or adviser available. Prepare the basic documents: the authorisation (licence, responsible declaration or prior notification), technical certificates, insurance, health registration, periodic inspection certificates, the acoustic study and limiter where applicable, and the complaints book or forms.

A record is drawn up at the end. Read it carefully, have your observations and representations recorded, and remember that your signature is usually a mere acknowledgement of receipt. Do not sign statements with which you disagree, and ask for a copy. The record is not yet a penalty: it is the document on the basis of which the Town Council may require defects to be remedied or begin penalty proceedings.

You must then pay close attention to time limits. If you are required to remedy something, you will have a limited period; if proceedings are opened, you will normally have some fifteen days to submit representations and propose evidence. If the inspection finds essential inaccuracies in a responsible declaration, the authorities may declare it ineffective and order the activity to cease, so the case should be studied with a lawyer as soon as possible.

Yes. Responsibility for monitoring and penalising noise from activities lies mainly with town councils, under the Noise Act (Law 37/2003), Royal Decree 1367/2007 and Law 1/2007 against noise pollution in the Balearic Islands, as well as the municipal ordinance on noise and vibrations. Following a complaint or an inspection, the Town Council may require corrective measures, open penalty proceedings and adopt interim measures such as sealing music equipment or temporarily suspending the activity.

The situations most often penalised are not having the compulsory recording sound limiter, having tampered with or disconnected it, not keeping the acoustic study on the premises, altering the sound installation without authorisation or exceeding the emission and immission limits. Some areas, such as part of Sa Gerreria, have been declared special acoustic protection zones, with a stricter regime.

An interim measure must be reasoned and proportionate, and may be appealed. Lifting a seal usually requires proof that the defect has been remedied, and sometimes a new acoustic study showing compliance with the limits. If you receive a sealing or cessation order, you should act at once, both to correct the problem and to challenge the measure if it is disproportionate.

The first step is not to ignore the notification and to request a complete copy of the case file. From there, the defence rests on examining how the noise was measured: where the measurement was taken (normally at the complainant's home), with what sound level meter and calibration, under what conditions, what the background noise was, what time band and acoustic zone were applied, and whether the procedure required by the rules was followed. A defective measurement may invalidate the penalty.

It is also advisable to show that the premises comply: licence or responsible declaration, acoustic study and insulation certificate, recording sound limiter with its records and the corrective measures adopted. If there is technical doubt, a counter-measurement by a qualified technician may be submitted. Limitation of the offence and lapse of the procedure must also be monitored, and the reductions in the penalty for acknowledging liability and for voluntary payment provided for by Law 39/2015 should be considered.

You should be aware that the administrative route is not the only one: if the premises are in a multi-owned building, the owners' association may bring an action for cessation of nuisance activities under Article 7.2 of the Horizontal Property Act, and the neighbour may bring a civil claim for nuisance and damages. It is therefore important to resolve the cause of the noise, not merely to appeal against the fine.

An acoustic study is a technical document, drawn up by a qualified professional, analysing the noise generated by an activity and the insulation of the premises. It includes a description of the noise sources (music, machinery, extractors, cooling equipment), the insulation provided by the partitions against adjoining homes and the façade, the expected or measured emission and immission levels, and the corrective measures needed to comply with the limits set by the rules for the acoustic zone of the premises.

As a general rule, it is compulsory where the activity has significant noise sources: premises with music or recreational activities, some restaurants and bars with sound equipment, and establishments with noisy machinery. It is also required in order to obtain or amend the authorisation when installations are altered, and to programme and seal the recording sound limiter. Municipal ordinances may require it in further cases.

It must also be kept available on the premises: not having it, or having one that does not reflect the actual installation, is an offence that may justify sealing. If you change the sound equipment, layout or opening hours, the study must be updated. And if there is a complaint, a sound, up-to-date study is the best evidence for the defence.

Not without authorisation. Occupying the public highway with tables, chairs, awnings, parasols, heaters or enclosures is a special common use of public property requiring municipal authorisation. In Palma that authorisation is linked to the licence or authorisation of the establishment, is granted subject to conditions (area, number of tables, furniture, hours, accessible pedestrian route) and for a limited period, and is usually personal, meaning that it cannot be transferred without processing the change.

Extending the authorised area, changing the furniture or installing fixed elements such as a marquee, enclosure or platform requires an amendment of the authorisation and, depending on the case, a planning licence. These elements are subject to further restrictions, especially in protected areas, narrow streets or places with historic heritage, and must comply with fire safety, accessibility and noise rules.

Occupying more space than authorised or outside the permitted hours is an offence which may lead to a fine, an order to remove the items and, if repeated, revocation of the authorisation. If you believe your application has been refused without sufficient grounds, or you have been ordered to remove the terrace, an appeal is possible; the important thing is not to miss the time limits.

Changing the activity is not merely a change of sign: three things must be checked. First, that the new use is compatible with the planning rules and with the building (some uses are restricted in certain areas, floors or buildings, or by the bylaws of the owners' association). Second, how the new activity is classified under Law 7/2013 (major, minor or harmless), because this determines the authorisation and the technical requirements. And third, what works or installations it requires: ventilation, fire safety, accessibility, sound insulation or sanitary installations.

The usual process includes the project or technical report, the planning compatibility report, the prior notification or licence for the necessary works, the technical certificate that the installations conform to the project and the responsible declaration or licence for the new activity, as appropriate. If the previous activity was authorised, its cessation should also be filed and, where applicable, the insurance and sectoral registers updated.

The most common mistake is to begin the works or the activity on the assumption that the new use will be accepted. A prior study of the premises and the rules avoids investing in a refurbishment that cannot later be legalised.

The suspension order is a planning enforcement measure issued when works are carried out without a licence or prior notification, or depart from what was authorised. Its effects are immediate: work must stop, and the Town Council may seal the site, remove machinery and, in the event of non-compliance, impose periodic penalty payments. Continuing the works after the order aggravates liability and may lead to a heavier penalty.

The suspension is usually accompanied by the opening of proceedings to restore planning legality and penalty proceedings (Law 12/2017 on town planning in the Balearic Islands). A period is granted to apply for legalisation if the works can be legalised; if they cannot, their demolition or the restoration of the prior state may be ordered. Penalties may extend to the developer, owner, builder and technician. For a business, moreover, unlawful works may prevent the activity licence from being processed.

The order may be appealed and suspension of the measure requested where justified. The most urgent steps are to verify whether the works can be legalised, to provide the project and documents showing that they are covered, and to negotiate a legalisation timetable with the Town Council. The sooner you act, the lower the costs tend to be.

It is the right of individuals to be compensated for damage suffered as a result of the normal or abnormal operation of public services, provided that they have no legal duty to bear the damage (Law 40/2015 on the Legal Regime of the Public Sector). To succeed, there must be real, effective, economically assessable and individualised damage, and a causal link between that damage and the action or omission of the authorities.

In the business sphere, common cases include losses from public works that prevent access to the premises for months, the closure of an activity later declared unjustified, licences refused or annulled through an error by the authorities, or damage caused by the poor condition of the public highway or municipal facilities. Compensation may include actual loss (expenses, lost investments) and loss of profit, if proved.

The claim is filed with the authority concerned within one year of the event or of its harmful effect becoming apparent (or of the annulment of the act being declared, if the damage arises from an annulled act). If it is dismissed or not decided, a judicial review action lies. Proof and quantification of the damage are decisive, so invoices, accounts and, where appropriate, an expert report should be gathered from the outset.

Three stages must be distinguished. During the penalty proceedings, after notification of the commencement decision, there is usually a period of some fifteen days to submit representations and propose evidence; this is the most important stage, because it allows the facts, the legal classification, limitation, lapse and proportionality to be disputed. At this stage the reductions of 20% for acknowledging liability and 20% for voluntary payment, which may be combined, provided for by Law 39/2015, may also be applied.

When the penalty decision is issued, acts of the Mayor, the Governing Board and the Full Council generally bring the administrative route to an end. They may be challenged by an optional appeal for reconsideration (recurso de reposición) within one month, or directly by a judicial review action within two months. If the penalty comes from another body of the regional administration, a hierarchical appeal (recurso de alzada) may lie, also within one month. The time limits cannot be extended: once they have passed, the act is final.

Filing an appeal does not automatically suspend payment or the measure adopted, but interim suspension may be requested, particularly if there is a risk of irreparable harm (for example, a closure). Before appealing, you should study the complete case file, compare the cost of appealing with that of paying with reductions and assess the real prospects of success.

Establishments open to the public must be accessible. The applicable rules combine the Technical Building Code (basic document DB-SUA, accessibility section), Royal Legislative Decree 1/2013 on the rights of persons with disabilities and, in the Balearic Islands, Law 8/2017 on universal accessibility in the Balearic Islands and Decree 1/2023 implementing it for spaces in public use. In addition, town councils may require further conditions in their ordinances.

In practice, the assessment looks for an accessible route from the public highway into the premises, with step-free access or a ramp or lifting platform, doors of sufficient width, circulation and turning spaces, counters or bars with an adapted section and, depending on the type of activity, area and capacity, accessible toilets and signage. In existing premises, where a complete solution is not feasible because of technical limitations or protection of the building, reasonable adjustments are accepted and must be technically justified in the case file.

Non-compliance may give rise to requirements when the licence is processed, to penalties (the Law distinguishes minor, serious and very serious offences) and to claims from users. It is therefore advisable for the technical project to address accessibility from the start and, if the premises already exist, for this to be reviewed before refurbishing or changing activity.

The licence or authorisation is linked to the activity and the premises, not to the person, so the holder may change without the activity changing. In the Balearic Islands this is done by means of a responsible declaration of change of holder of the activity, together with notice of the transfer from the transferor. It is normally required that the activity remains unchanged, that the premises meet the conditions of the authorisation and that the fees are paid. If the new holder introduces changes, the amendment of the activity must also be processed.

A prior review is advisable: check that the activity has a valid and complete authorisation, that no penalty proceedings or requirements are outstanding, that periodic technical inspections are up to date and that the associated authorisations (terrace, music, health registration) can be transferred. Many authorisations to occupy the public highway are personal and non-transferable and must be applied for again.

The transfer also has a contractual aspect: if the premises are rented, assignment of the lease requires verifiable notice to the landlord (Article 32 of the Urban Leases Act), who may be entitled to a rent increase and other rights. It is advisable to agree who is liable for previous penalties or debts and to make payment conditional on the successful change of holder.