The rise in popularity of short-term rentals through websites such as Airbnb and Roomarama has given tourists the opportunity to live like locals, and those looking for a place to live for only a month another option to the standard hotel. However, these short-term rentals are causing headaches for neighbors and landlords, and legal troubles for those renting out their homes. In many states, including New York, some short-term rentals may violate state law.
A real estate development and management company recently sued an investment banker and his co-tenant for renting out their leased Tribeca apartment by the night. The tenants leased the rent-stabilized apartment for $1,000 per month, but rented it out for up to $450 per night through Airbnb. The management company alleged that the tenant “began renting the premises to various individuals unknown to plaintiff and without plaintiff’s consent on a daily and/or short-term and transient basis.”
In New York, residents of multi-unit buildings are prohibited from renting their permanent residences for less than 30 days unless the owner or primary tenant remains in the unit. Even when the owner or primary tenant remains in the unit, there cannot be more than two guests. Since the passage of this law in 2010, enforcement has been an issue and the City Council has asked for a funding increase to hire additional. Still, there are thousands of listings on numerous sites such as Airbnb, TripAdvisor, and Vacation.com.
Airbnb has said that it aims to give New Yorkers affordable options. But the steep price increase suggests otherwise. The lawsuit estimates that the tenants could make a yearly profit of over $90,000.
Early this year a court evicted a couple from their rent-stabilized penthouse in Manhattan after they advertised the apartment on Airbnb at almost triple the monthly rent. And late last year, an owner of another Manhattan apartment was temporarily stopped form renting out rooms in her apartment through Airbnb.
United American Land v. Krueger