NYC Judge Rules Airbnb Rental Is An “Illegal Hotel”

But this isn't the first time Airbnb has gotten into legal hot water.

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Airbnb, a site that lets people around the world find short-term housing accommodations, suffered a major setback this month when a judge ruled that one of its users broke an “illegal hotel” law in New York City.

The trouble began last September, when Nigel Warren rented out his bedroom in his East Village apartment on Airbnb for three days. Even though his roommate was home and there was no reported misbehavior, New York City’s special enforcement officers slapped fines of more than $40,000 on Warren’s landlord for violating illegal transient hotel rules, according to the New York Times. New York City law restricts residents from renting out apartments, or rooms in them, for fewer than 30 days, unless they are also living in the home during the guests’ stay.

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On May 9, Judge Clive Morrick ruled in favor of the city, reasoning that since the Airbnb host had “complete strangers” residing in his apartment during the stay, Warren’s landlord was indeed operating an unlicensed hotel and has to pay a fine of $2,400. (Warren agreed to pay the fines on behalf of his landlord in order to avoid eviction.)

No stranger to similar controversies in other cities, Airbnb released a statement saying it will continue to fight the legal battle. While its terms of service say that users are fully liable for complying with local laws, the company maintains that New York City’s laws are not aimed at individual tenants, but instead at preventing landlords from buying residential buildings and operating them as hotels, reports CNN Money. The San Francisco-based company, which currently operates in over 33,000 cities in 192 countries, has raised the ire of authorities elsewhere — most recently in Amsterdam, where the main issue is that local laws, such as paying tourist taxes, are circumvented with Airbnb transactions.

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Since New York City’s mayor’s office of special enforcement began carefully scrutinizing short-term rental issues in 2006, it has received more than 3,000 complaints, conducted nearly 2,000 inspections and issued nearly 6,000 notices of violation, according to the New York Times. In January, the travel news site Skift estimated that approximately half of Airbnb’s listings in New York City “are likely illegal.”

This is the second time in less than a week that the new wave of sharing services, which are all part of the burgeoning “collaborative consumption” movement, have come under fire in New York state. On May 16, the car-sharing service RelayRides suspended operations in New York City after state officials accused it of violating insurance laws and issued an alert warning consumers about the risks of car sharing without adequate insurance.

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21 comments
santa
santa

Leave it to new york city to step on its citizens. Next it will ban uber, sidecar and lyft and any other modern rental service.

KenJoseph
KenJoseph

Did this happen in America, land of the free, or is it a communist state that made it illegal to rent out an apartment for less than 30 days (Man I would like to see that - an apartment morph in to a hotel between day 30 and day 29 - that must be an awesome sight.

I am confused. Surely in a free country you would have a right to set up business and provide a service. Don't you have a right to enter into a contract to provide a service for a fee. If you and I agree to exchange money for a service (3 days in your residence) and we are both adults and we both agree on the service being fair for the price charged, what is the problem.

That is how a democracy grows. 

However if there is corruption or another agenda, it would make sense. If a hotel is losing business to new competition, bring in a law to wipe them out. 

Well I will have to cross NYC of my list of places to visit, because I prefer a home away from home, a residence not a hotel. I choose to be able to cook, wash, iron and eat in addition to sleeping. I choose complete privacy in a fully self contained self catering apartment. 

If I use a hotel, I get no privacy, no kitchen, no laundry and if all NYC provides ia a hotel (a place to sleep - then forget it!

What a great way to destroy tourism - reduce your accommodation choices to one type.   

jim3018
jim3018

I had a TERRIBLE experience with AirBNB. You are better off forking up a few extra bucks for a last minute deal through expedia or some other better reputed travel site with better customer service.


 I put in an offer on AirBNB, but when discussing logistics, got a bad/creepy feeling when corresponding with my host, and told this person I was withdrawing my offer. Despite having this IN WRITING, my host clicked "accept" of my offer from his end, before I could formally cancel the request, resulting in the charge on my credit card of $500. I wrote to AirBNB customer service several times, with written proof that I had told my host I didn't want to stay there prior to his clicking "accept". But the service is NON EXISTENT. It takes at least 15 minutes clicking around the website to even find the contact email address, there is no contact phone number where you can speak to a rep, and it take takes another at least 3 days to get a generic form response. When my issue was not resolved, I wrote again, and they never got back to me.


I am mid-20s, graduate student, have done the whole backpack in Europe on a dime, and traveled extensively and had many misadventures which become stories later on, but this AirBNB is my worst experience / scam/ rip-off. DON'T Use it. If you're lucky and everything goes as planned great, but as soon as there's one hiccup, they don't help you out, and leave everything to be your problem, and you to pay the non-refundable fees, and won't even answer your inquiries.


I will never use this service ever again, and I would not recommend it to anyone I know.


DisgustedManager
DisgustedManager

Its about time the City has taken action on this subject.  Unfortunately, the City in its infinite wisdom, has made it a precedent to fine the Landlord for the Tenants actions.  Just as the City has made the Landlord responsible for what and where the Tenants do with their garbage, they have now made the Landlord responsible for the actions of the Tenants when they turn your property into an SRO building.  Now, this would be logical if the City would make it easier for the Landlord to evict, and hold the Tenant responsible for their actions, but they haven't.  The fines go above small claims court, so the legal fees incurred by the Landlord/Owners ridiculous.  I can fully agree with the City if its the Landlord that is violating the code, but its mainly the Tenants that are renting out the Landlords property.  I am writing this as a voice of experience in this subject.  As a property manager, I have seen this done by Tenants that are extremely wealthy, and in one case the Tenants rent was paid by a major corporation as part of their salary.  This person was from another country, and a major executive within the company.  The rental unit was a beautiful triplex apartment, that was advertised overseas in another language.  At times, there were up to four different families occupying this extremely large and newly renovated unit.  We notified the City on at least five occasions of what was happening, and they City told us it was a Landlord/Tenant issue, and not their problem.  We are currently in court as I write this, but after we refused to grant another lease to this person, they found another location to run their operation from.  Their rent was over $13,000.00 per month, so another Landlord was more than happy to give them a lease to another beautiful location.  The new Landlord has no idea of their operation, as the out of state relocation company has impeccable credentials.  The advice I can give Landlords is never rent to a Tenant that has the an out of state relocation company representing a corporation that uses an out of state headquarter address when they have a office here in NYC.  Include an immediate eviction clause , and security forfeiture in your lease if the Tenant is caught turning your property into an SRO.  And, by all means, spend the two thousand dollars to install a security camera to watch the coming and goings of the foreigners in your building.  Remember, just because one the Tenants is a corporate executive and is married to a highly respected individual in another field, do not let greed cloud your judgement.  The only agency that wanted to get involved was the NYC Hotel association.  These animals destroyed our floors, walls, bathrooms, every brand new Bosch appliance we had just installed, vanities, two washing machines, and the list goes on;over $60,000.00 in damage.  To all property managers...pictures, pictures, and more pictures.  The burden of proof is on you, not some animal just passing through          

BarryHannah
BarryHannah

"unless they are also living in the home during the guests’ stay". Can someone pleas clarify what the legal definition is of this caveat. Do they need to be sleeping on the premises to be legally 'living in the home'. How many hours a day do they have to spend in the premises so that it legally constitutes 'living in the home'. If I take a holiday for a week and all my things are in the apartment and I intend to return after my holiday, am I not technically still 'living' at that address - i am simply holidaying at another address. Is the legal definition on what constitutes 'living at home' precise?

anotherusername
anotherusername

I wish a reporter or NYC or another agency would investigate the discrimination against service animals on Airbnb.  According to federal laws, Airbnb should be considered an AGENCY and not simply a listing service since it is the one which manages the listings, accepts payment from the renters and then pays the "landlords."  They are no different than a real estate agency which provides listings.

sundesy
sundesy

We lost the country when the city said you need license to put up a lemonade stand. Government is devoid of any sensibilities.  

elrk1958
elrk1958

So carpools are out? Isn't that what ride sharing it? 

genwilliams
genwilliams

This is a real shame. If the law in NYC says you can't rent out your apartment (or rooms therein) unless you're staying there yourself, fine. But lots of Airbnb listings are spare room listings. My boyfriend & I stayed in NC with an Airbnb host this April just gone. Our host was present throughout, and very kind; it was so much more welcoming than an overpriced, faceless hotel (I've had my share of those in NYC), and within our budget, which hotels were very much NOT. A fairer solution would be to find a way to differentiate between spare room rentals and illegal "absent host" rentals, so that those who wish to use Airbnb without breaking the law can still do so. But I guess it's easier for them just to shut the whole thing down and assume everyone who wants to visit NYC can afford the astronomical hotel prices.

jdrch - "The only people I can imagine using it are the extremely poor or naive." I don't know whether you mean guests or hosts, but if the former I guess our budget constraints mean we fall under the "extremely poor" then, though I'm not sure that's the case. We saved up and booked our flights well in advance (to get flights we could afford); we couldn't afford to book accommodation til a couple of months later and we were then stunned by the hotel prices; even the basic ones were beyond our budget. Thanks to Airbnb we instead had the comfort of getting to know our host by email ahead of our stay, staying with a decent and helpful person who gave us local knowledge and made our trip to NYC one we'd want to repeat, and making a friend in New York!

Shame if visiting one of the biggest cities in the world becomes something that only the affluent can afford to do; Airbnb made it accessible to people of all budgets. I hope their appeal is successful.

jdrch
jdrch

I've never understood the allure of this service. The only people I can imagine using it are the extremely poor or naive.

JosephGlackin
JosephGlackin

Gee, who wouldn't want to run into different people coming out of your next door neighbor's apartment every few days?

It would make for such a secure feeling!

santa
santa

@jim3018 If you paid on a credit card you could dispute it with the card company. did you do that?

beks77
beks77

@jdrch Have you ever stayed in a nice hotel in NYC? I do frequently, as I'm there often, and it becomes cost prohibitive. I am financially secure and not naive whatsoever, but going for a weekend can cost upwards of $1000+ to stay in decent hotel. There are some properties that put NYC 5-star hotels to shame, so you're off base on "poor/naivete" issue. Needless to say, I'm still a hotel person, but it's a great alternative for those who don't want to shell out $1000's for a quick trip. 

thomasvesely
thomasvesely

@jdrch 

this is a strata between backpackers and hotels.

30-70 $ solutions.

though very expensive properties are also available.

it often puts a human face on your stay, it can help to meet locals.

it is a great service/ idea.

SarahAshkar
SarahAshkar

@anotherusername @elrk1958 

Possibly. I may be confused. I have always understood "ride" sharing as formalized car pooling. There are apps where you can find other people who have a car or need a ride to a similar destination as you. Zimride is one example, but I am sure there are others. 

 "Car" sharing, however, I have understood to be a company wherein you buy a share in having access to a car Zipcar RelayRides, and Car2Go, for example. The article states that the reason car sharing business was suspended is because of insurance issues with multiple people regularly driving the same cars. This wouldn't be an issue in ride sharing, where Bob drives is own car, but lets others take passenger seats in it. 


Right? Or am I missing something?