Illegal Hotel Operator to Pay $1M to End Housing Lawsuit

Smart Apartments, a short-term housing operator that put up visitors in illegally converted apartment buildings, will pay a $1 million penalty to the city and be permanently banned from running its operation. “Unregulated illegal hotels are unsafe and pose a danger to the community and those who unwittingly use them,” Mayor Bloomberg said in a statement.

The settlement closes the lawsuit the city filed in New York State Supreme Court against Smart Apartments in October 2012. The company has also agreed to cease advertising its residential apartments for stays of less than 30 days.

The city filed the lawsuit following a year-long investigation into Smart Apartments’ accommodations, having been tipped off by a number of 311 calls and other complaints. A New York State judge ruled in the city’s favor back in February. The $1 million in damages is the full amount sought by the city in the suit.