Starting in 2010-2011, New York began addressing the burgeoning short term rental business via amendments to a host of laws: the Multiple Dwelling Law (Section 4. a. 8(a)), the Housing Maintenance Code (Section 27-2004. a. 8(a)), the Administrative Code (Section 27-265) and New York City Building Code (Section 310.1.2) which all prohibit short term rentals in Class A multiple dwellings. The aim was to ensure that such dwellings were used “for permanent residence purposes” — generally meaning that it became illegal to rent such a unit for less than thirty days.
The last few years have seen explosive growth in illegal subletting, with the main driver being the increasingly mainstream adoption of short term rental sites like airbnb.com. Airbnb and its ilk, while disrupting the entire hotel industry, are also impacting hosts (people that rent or sublet their home through the rental sites), their guests, other tenants in the building, property managers, and, in some cases, even entire cities – cities where housing crises are made more acute with housing stock taken off the market and converted into unregulated hotels.
The proliferation of tenants’ use of apartments as transient accommodations has not gone unnoticed by New York City’s Department of Buildings (“DOB”). The DOB has been issuing violations to the property owners of buildings where such practice is detected. The violations are steep, running as much as $1,000 per day! Worse yet, the Environmental Control Board (“ECB”) has been sustaining such violations even where the building owner had no knowledge of such use.
On February 17, 2015, the New York City Housing Court (Hon. Jack Stoller J. H.C.), after trial, held that a rent stabilized tenant’s nightly renting of his apartment to various third parties via Airbnb constituted illegal profiteering and awarded landlord a final judgment of possession and warrant of eviction. Notably, the Court held that tenant’s infraction was incurable and thus landlord was not required to first serve tenant with a notice to cure before commencing the eviction proceeding.
The increasing use of apartments for transient “AirBnB”-type occupancy discussed elsewhere in this newsletter has spread to co- ops and condominiums as well. However, because of their unique ownership and operational features, co-ops and condos — and their residents (who each paid significant sums for the privilege of owning their residence, and never expected to run into transiently new faces in the corridors and elevators on a revolving door basis) —are impacted differently. While at least one case, which is referenced in other articles in this newsletter, has resulted in the eviction of a rent-regulated tenant based on illegal profiteering, that basis would likely not exist in a co-op or condo setting. Consequently, co-op and condo Boards and managing agents need to approach transient occupancy differently than do rental building owners.
So you just discovered one of your tenants is subletting, be it through HOA, other tenants, or from an alert from our service. There are a number of potential next steps – depending on how much of a nuisance and liability is posed. These next steps range from taking down the listing, discussing with the tenant, or taking legal action to stop the behavior, possibly leading to an eviction.