NYC Landlords Sue Airbnb, Tenants for Local Law 18 Violations

Two Upper West Side building owners have filed the first lawsuits against Airbnb and tenants it says are violating Local Law 18, the short-term rental regulations that went into effect last month requiring Airbnb hosts to register with a city-run database.

LL18 permits property owners and operators to place their units on a “do-not-register” list that is supposed to immediately flag an Airbnb registration application as prohibited by request of the building’s owner or management.

According to a lawsuit filed on behalf of Canvas Property Group, which manages 207 Columbus Avenue, Airbnb continues to allow tenants to list units of the building despite its inclusion on the do-not-register list.

Suzanne Adams, a New York Supreme Court judge, has issued a temporary restraining order directing Airbnb and the tenant to stop advertising the 207 Columbus Avenue listing.

A second lawsuit against Airbnb and a tenant has been filed by Milstein Properties regarding a unit at 30 West 63rd Street, according to a report in TheRealDeal.

Rosenberg & Estis, the law firm that represents Canvas, said the ruling paves the way for the building’s owner and Canvas, the operator, to evict the tenant for illegal subletting and to pursue damages from both the tenant and Airbnb.

“This is a clear signal to Airbnb and its hosts in New York City that they cannot ignore the law,” Michael Pensabene, a member of Rosenberg & Estis’ litigation department, said in a statement.

According to Rosenberg & Estis, a tenant at 207 Columbus Avenue rented her apartment as a vacation home on Airbnb after Canvas had put it on the do-not-register list. The law firm said the tenant never lived in the three-bedroom apartment and had rented it solely as an Airbnb host.

“Unfortunately, this is all too prevalent in New York,” Peter Kane, a Rosenberg & Estis member, said in a statement.

“Short-term rentals have become a cloak-and-dagger operation with so-called hosts giving their guests secret instructions to dupe building owners,” Kane added. “Despite its ability to check the city register for prohibited apartments, Airbnb turned a blind eye and conspired with the tenant to rent the unit to tourists and visitors.”

In August, a Supreme Court judge tossed out Airbnb’s lawsuit seeking an injunction to block New York City’s registration rules for short-term rentals.

Crackdown on Illegal Rentals

Local Law 18, passed in January 2022, requires Airbnb hosts to register with a database overseen by the Mayor’s Office of Special Enforcement, to submit diagrams of their homes and a list of who resides there, and to prove they are abiding by zoning and safety regulations, among other requirements.

City officials said the law is aimed at landlords the city claims have been illegally collecting Airbnb booking fees for their properties. The law imposes penalties of up to $5,000. Airbnb is required to certify that all of the information provided by its hosts to NYC is accurate or be subject to fines of up to $1,500 per violation.

In a lawsuit filed in June, Airbnb said the requirements amounted to a “de facto ban” of the home-sharing platform in NYC “by requiring extensive and intrusive disclosures of personal information and forcing open-ended agreement to labyrinthine regulations scattered across a complex web of laws, codes, and regulations.”

State Supreme Court Justice Arlene Bluth dismissed the complaint. In her ruling, the judge said NYC had provided the home-sharing giant with “a very simple way” to properly verify listings. The judge also chastised Airbnb for “making little or no effort” to make sure its NYC hosts registered with the city.

“Airbnb has known about these rules for many months and has had ample opportunity to tell its hosts about these new rules and tell them to apply for a registration number,” Bluth said in the ruling.

“Airbnb cannot make little or no effort to tell its hosts to register and then complain that it might have to take down hundreds or thousands of listings because they are not registered,” the judge added.

The city said the new rules are needed to shut down widespread illegal rental activity that has been using fake host profiles on Airbnb and other sharing platforms to market “substandard” short-term housing.

The registration requirements were enacted in the wake of a lawsuit filed by OSE to shut down what it called an illegal short-term rental operation being run by a licensed real estate broker in Turtle Bay.

The lawsuit was announced by Mayor Eric Adams, who said that “bad actors” have for several years “used fake host profiles on popular sites like Airbnb to deceive and lure unsuspecting guests into paying for substandard lodging at illegal rental listings.”