In New York City, sub-letting long-term rentals as a daily or weekly vacation rental allows many tenants to make ends meet in a place where the cost of living is through the roof.
Many do so through websites such as Airbnb, and can earn up to thousands of dollars a month.
What they’re doing is illegal under both city occupancy code and state law, per an administrative judge ruling handed down in May. Still, it’s a thriving black-market industry, with about 30,000 New Yorkers signed up as hosts on Airbnb’s website.
Now, this New York City landlord-tenant law issue has some landlords taking decisive action against a practice they say is steeply carving into their profits.
In Nolita recently, sibling building owners paid $20,000 to hire a private investigator to pose as a tourist, in order to catch a tenant illegally renting out her apartment online to strangers. The New York Post reports that the tenant had been paying some $1,400 monthly for her rent-stabilized, one-bedroom apartment. However, she was allegedly earning some $4,500 monthly by subleasing the unit. She reportedly did this using two online marketing sites, including Airbnb.
The tenant used her middle name on the websites, on which she called the apartment a “Nolita Nest.” It appears the woman was living with her husband in New Jersey while she sublet the apartment. Her lawyer later explained that her brother was living at the residence for the summer. However, when the landlords questioned the tenant, he said he was a university student interning in the city for the summer. He was not a relative or even a friend of the tenant’s. He admitted he had arranged the rental on Airbnb.
Crain’s New York Business estimated that in New York alone, such illegal sublet rental arrangements will earn tenants roughly $1 billion this year. To put it into perspective, it outpaces the city’s healthy cruise-ship industry by five-fold.
Inevitably, this has a negative impact on hotels in Manhattan and throughout the city.
The Nolita landlords say their tenant has earned about $500,000 doing this over the course of the last four years.
In this situation, landlords sometimes must go through the process of evicting both the leased tenant and the subleased tenant, even if they had no formal or direct agreement with the latter.
The law was changed in 2011 to bar New Yorkers from renting out an entire apartment for a period of less than 29 days. The original bill was intended to stop landlords from illegally converting residential buildings into hotels.
However, it’s not exactly being used that way, and Airbnb is now lobbying for some leeway for those who occasionally rent a few times a year to help make ends meet. If officials were to grant Airbnb’s request, it’s unclear what kind of regulatory concessions – if any – city and state leaders could make so that the terms would be agreeable to landlords.
Part of the problem is that landlords still maintain liability for what happens on the property, regardless of who is occupying the unit. So when someone sublets, they have no control over who is in that unit. Many times, when the deals are conducted over the internet, even the tenant doesn’t know the person. The two may never even meet in person.
Still, as this case shows, many New Yorkers are continuing to simply take their chances and hope they aren’t caught. The law is only enforced when a complaint is filed.
According to the Mayor’s Office of Special Enforcement, the city has received some 3,100 complaints and issued some 6,200 violations since 2006. Many times, one unit or tenant is cited for multiple violations.
The Law Offices of Ira S. Newman provides landlord-tenant litigation representation in New York City, Long Island, Great Neck and throughout the area. Call 516-487-7375 or send us an e-mail.
Nolita landlords say tenant earned $500K over 4 years by illegally renting out apartment as a NYC ‘hotel room’ – used private eye posing as tourist to out sublet, July 22, 2013, By Julia Marsh, The New York Post
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