European Court of Justice Approves French Law Regarding Short-term Property Rental
By a decision of 22 September 2020, the Court of Justice of the European Union confirmed that French legislation on tourist renting is in conformity with European Union law.
The Legal Facts
By decisions of the Tribunal de Grande Instance de Paris (Regional Court, Paris, France), confirmed by the Cour d’appel de Paris (Court of Appeal, Paris, France), two landlords in Paris who rented out studio apartments without authorisation from the local authority on a website had been ordered to pay a fine of EUR 15 000.
The use of the premises be changed back to residential had also been ordered
That sentence was justified by the fact that those landlords did not have prior authorisation from the City of Paris, which was necessary to lease those apartments as part of a short-term tourist lease.
What French Law Provides for Short-term Rental
French law limits the possibility of renting a principal residence for a short period to a maximum of 120 days per year.
In order to rent a dwelling for short periods, landlords must make a declaration in the town hall, regardless of the length of the rental, in order to obtain a registration number which must be indicated in the rental announcement.
Note that tenants must have written approval from their landlord in order to be able to rent their accommodation on a seasonal basis.
For other premises (e.g. secondary residence) and if the duration exceeds 120 days, in municipalities with more than 200,000 inhabitants and in those of the three departments bordering on Paris, this activity may be subject to a permit to change the use of dwellings to commercial tourist activities.
Break these obligations is subject to heavy fines.
The Position of the Court of Justice of the European Union
In its decision of 22 September 2020, in accordance with the European Directive 2006/123 on services in the internal market, the Court of Justice of the European Union held that:
« National legislation which, for reasons intended to ensure a sufficient supply of affordable long-term rental housing, makes certain activities consisting in the repeated short-term letting, for remuneration, of furnished accommodation to a transient clientele which does not take up residence there subject to a prior authorisation scheme applicable in certain municipalities where rent pressure is particularly severe is :
- justified by an overriding reason relating to the public interest consisting in combating the rental housing shortage and
- proportionate to the objective pursued, inasmuch as that objective cannot be attained by means of a less restrictive measure, in particular because an a posteriori inspection would take place too late to be genuinely effective. »
This decision is in line with the view of the City of Paris that many landlords in the capital illegally lease tourists without authorisation or compensation.
This European decision is very important since the situation is the same in many European cities: housing shortage is a problem and municipalities are under pressure to manage the rental market.
The case in France, however, has not yet been completed: the French judge will now have to verify that the city of Paris does indeed provide evidence of a housing shortage.
To read the judgement :