Management Company, Owner Sue Airbnb and Tenant for Local Law 18 Violations

On Sept. 5, the city began enforcing Local Law 18 rules that require licenses for short-term rental hosts, banned whole-home rentals, and limited guests to two per reservation. Local Law 18 also requires registration requests to be denied for buildings on a prohibited buildings list. To be placed on the list, building owners notify the mayor’s Office of Special Enforcement (OSE) that short-term rentals are not allowed in their buildings. The owners must certify that leases and other occupancy agreements for dwelling units within their buildings prohibit short-term rentals. So, if a tenant applied to register their unit as a short-term rental, the application would be immediately flagged as prohibited by request of the building owner or management.

According to analytics site AirDNA, New York City Airbnb listings have dropped 77 percent, from an estimated 20,000 in June to just 4,600 in September. Although there’s been a drop in listings, the enforcement of the short-term regulations is being put to the test.

Management Firm Gets TRO Against Tenant

Recently, a lawsuit was filed against Airbnb and the tenant of an Upper West Side apartment managed by Canvas Property Group for violating Local Law 18. In this case, the management company had registered the building to be placed on the prohibited buildings list. According to the lawsuit, Airbnb continues to allow tenants to list units of the building despite its inclusion on the do-not-register list.

Once the management company had knowledge that the tenant was renting her apartment as a vacation home on the Airbnb’s platform, its lawyers asked the judge for and have secured a temporary restraining order (TRO) directing Airbnb and the tenant to stop advertising the listing. The law firm said the tenant never lived in the three-bedroom apartment and had rented it solely as an Airbnb host.

Owner Seeks Eviction and Damages

The temporary restraining order decision was made after the state Supreme Court’s dismissal of Airbnb’s challenge to the legality of Local Law 18. According to the law firm, the decision paves the way for the management company and the owners of the apartment to evict the tenant for illegal subletting, but also to pursue damages from both the tenant and Airbnb.

The TRO remains in full force and effect against both the tenant and Airbnb until further argument can be heard by the court on the underlying motion for a full injunction.