CJEU approves French approach to regulating short-term leases

The Court of Justice of the European Union (CJEU) has sanctioned a French legal provision requiring in certain locations the prior authorisation by local authorities for short-term leases – typically leases arranged through digital platforms.

While the previous Airbnb judgment (C-390/18) dealt with the admissibility of regulating platforms mediating leases, the September CJEU judgment in the joint cases of Cali Apartments (C-724/18 and C-727/18) deals with the possibility of regulating providers of accommodation.

The main point of contention of the disputed French regulation has been that obtaining official consent is conditional upon the concurrent conversion of (other) non-residential premises to premises for housing.

The judgment is largely based on the opinion of Czech Advocate General Michal Bobek. According to the CJEU, the case falls within the scope of the Service Directive. At the same time, the public interest – in this case, affordable long-term housing – can justify a state’s intervention. However, the detailed arguments of the judgment make it clear that it is for the national courts to carefully monitor the proportionality of the authorities’ discretion.

At the European level, the sector at issue will also be affected by the Digital Services Act.

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