28 Sep 2020
It started in 2017 with two judgments by the Paris Court of Appeal ordering separate owners of studio apartments in Paris to pay a fine of €15,000 each for renting out apartments through the Airbnb website without authorisation from Paris authorities.
The Court cited the French Construction and Housing Code that requires prior authorisation for any change of use of residential premises in municipalities with more than 200,000 inhabitants and in the municipalities of Hauts-de-Seine, Seine-Saint-Denis and Val-de-Marne. The French court also ordered the defendants to restore their properties to their residential use, which use had changed due to their repeated short-term letting of furnished accommodation to a transient clientele.
As one might expect, the defendants filed appeals in front of the French Court of Cassation on a point of law, namely, that the objective pursued by the law which the Parisian Court was upholding, could be attained by means of a less restrictive measure, as required by Article 9(1)(b) and (c) of Directive 2006/123. Furthermore, it was argued that the implementation of that restriction does not satisfy the criteria found in Article 10 of the Directive.
In the context of the appeals brought by the two owners against the judgments delivered by the Court of Appeal, the Court of Cassation made a reference to the Court of Justice for a preliminary ruling, in order to ascertain the compatibility of the national legislation under examination, with Directive 2006/123.
A reference for a preliminary ruling allows the courts and tribunals of the Member States, in disputes which have been brought before them, to refer questions to the Court of Justice about the interpretation of European Union law or the validity of a European Union Act.
Article 9 of Directive 2006/123 of the European Parliament and the Council on services in the internal market, precludes Member States from making access to a service activity or the exercise thereof subject to an authorisation scheme unless a number of conditions are satisfied.
Article 4(6) of the Directive defines an authorisation scheme as any procedure under which a provider or recipient is in effect required to take steps in order to obtain from a competent authority a formal decision, or an implied decision, concerning access to a service activity or the exercise thereof.
Article 10 of the same Directive precludes the competent authorities from exercising their power of assessment in an arbitrary manner by subjecting authorisation schemes to several criteria. In furtherance of the foregoing, the authorisation schemes must be a) non-discriminatory; (b) justified by an overriding reason relating to the public interest; (c) proportionate to that public interest objective; (d) clear and unambiguous; (e) objective; (f) made public in advance; and (g) transparent and accessible.
In its judgement, the ECJ determined that:
Reactions to this judgement were mixed, but the mayor of the municipality subject of the proceedings took to Twitter saying that "this victory, awaited by many cities, marks a turning point for the supervision of seasonal rentals and constitutes a step forward for the right to housing for all". What do you think of the ECJ’s decision?