National rules making the repeated renting of accommodation for short periods to transient customers subject to authorisation is in line with the Directive (2006/123) governing the provision of services in the internal market, the Court of Justice of the European Union ruled on Tuesday 22 September (Cases C-724 and 727/18).
In France, Cali Apartments SCI and HX rent studios via the Airbnb platform repeatedly and for short periods without prior authorisation from the local authorities. They are challenging the decision by the French court which fined them and ordered the return of the property in question to their residential use.
The French Construction and Housing Code requires that, in municipalities with a population of more than 200,000 inhabitants and in those of three departments bordering Paris, changes of use of premises intended for residential purposes be subject to prior authorisation. Issued by the mayor of the municipality in which the building is located, this authorisation is subject to conditions set by the municipality with regard to the objectives of social mix and the fight against housing shortages, as well as market characteristics. It may be made subject to compensation in the form of the concomitant conversion into residential accommodation of premises having another use.
In its judgment, the Court rules that the Services Directive applies to the French legislation at issue. The latter, it adds, comes under the concept of an authorisation scheme (Article 4(6)), which involves an action by the service provider and a formal act by the competent authorities. The Court therefore assesses whether the establishment of such a scheme is justified and the criteria for granting the authorisations provided for by that scheme.
Relying on the reasoning of the Advocate-General (see EUROPE 12460/31), the Court notes that the French legislation, by seeking to prevent a shortage of long-term rental accommodation, is justified by an overriding reason relating to the public interest. Moreover, it is proportionate to the objective pursued because of its targeted scope and because another, less binding measure (e.g., a reporting system with a posteriori controls with the possibility of sanctions) would not immediately slow down the market’s rapid conversion trend.
The judge is of the opinion that the criteria for authorisation are justified and proportionate, in particular thanks to the possibility of making an authorisation subject to an obligation of compensation. However, it is for the French courts to verify whether this option actually meets a shortage of housing intended for long-term rental, is appropriate to the situation of the local rental market and is compatible with the exercise of the rental activity in question.
Finally, since the legislation at issue does not define numerical thresholds, the Court asks the local authorities to clarify the concept of ‘repeated short-term letting of furnished accommodation to a transient clientele which does not take up residence there’, in order to meet the requirements of clarity, unambiguity and objectivity.
See the judgment: https://bit.ly/2HnVE5e (Original version in French by Mathieu Bion)