Judgment of the Court (Fifth Chamber) of 21 July 2011 – Commission v Portugal

(Case C-518/09)

Failure of a Member State to fulfil obligations – Freedom of establishment and freedom to provide services – Carrying on real property activities

1.                     Freedom of establishment – Freedom to provide services – Restrictions –National legislation not drawing a distinction between freedom of establishment and freedom to provide services for real property brokers and estate agents – Real property brokers and estate agents established in another Member State obliged to set up an estate agency in the Member State concerned in order to be permitted to carry on business there – Not permissible – No justification (Arts 49 TFEU and 56 TFEU) (see paras 61-75, 87, operative part)

2.                     Freedom to provide services – Restrictions – National legislation, first, requiring real property brokers and estate agents to take out insurance compatible with that Member State’s legislation and to hold positive equity and, secondly, making those brokerage firms subject to the full disciplinary control of the national body responsible for the construction sector – Not permissible – No justification (Art. 56 TFEU) (see paras 76-84, 87, operative part)

3.                     Freedom to provide services – Restrictions – National legislation requiring real estate brokerages to carry out that business exclusively, with the exception of the management of property on behalf of third parties, and estate agents to carry on that business exclusively – Not permissible – No justification (Art. 56 TFEU) (see paras 64-66, 85-87, operative part)

Re:

Operative part

The Court:

–        by permitting the business of real property brokerage to be carried out only within estate agencies;

–        by requiring real property brokerages and estate agents established in other Member States to cover their professional liability by taking out insurance compatible with Portuguese legislation;

–        by requiring real property brokerages established in other Member States to hold positive equity in accordance with that legislation, and

–        by making real property brokerages and estate agents established in other Member States subject to the full disciplinary control of the Instituto de Construção e do Imobiliário IP,

the Portuguese Republic has failed to fulfil its obligations under Article 56 TFEU, and

–        by requiring real property brokerages to carry out exclusively the business of real property brokerage, with the exception of the management of real property on behalf of third parties, and

–        by requiring estate agents to carry out exclusively the business of estate agency,

the Portuguese Republic has failed to fulfil its obligations under Articles 49 TFEU and 56 TFEU;