Action for a prohibitory order against a co-owner in the use of the property subject for tourist purposes contrary to the designated use for residential purposes, exclusive jurisdiction or jurisdiction in matters relating to a contract?

Purpose to the CJEU Judgement of 11th November 2020, Ellmes Property Services Limited C. Sp, C-433/19

Abstract

In the CJEU Judgement of 11th November 2020, Ellmes Property Services Limited c. SP, C-433/19, the Court of Justice rules which court has jurisdiction to hear an action under Austrian law, in which a co-owner is requiring another co-owner to cease using its apartment subject to co-ownership for tourist purposes, on the ground that the co-ownership agreement does not permit that use. The referring court notes that the action could fall under two rules of jurisdiction contained in Brussels I-bis Regulation: the rule according to which the courts of the Member State in which the property is situated have exclusive jurisdiction in respect of rights in rem in immovable property and the rule according to which alternative jurisdiction in matters related to a contract lies with the courts of the place of performance of the obligation.

The moment in which this dilemma has been raised is very opportune. The growth of tourist apartments is a reality, which has caused the need to respond to questions such as those raised in this matter. This has caused that in cities where there has been an exponential increase in what are known as vacation rentals, it has had to be regulated by the States, through both the tourism sector regulations and the Immovable Property Laws.