Wednesday, June 8, 2016
Are NYC Rent-Controlled Tenants Using AirBnB Breaching Their Leases?
For the uninitiated, AirBnB is an online marketplace where prospective guests look for a bed to stay in from hosts listing spare rooms and properties for short term rentals. They operate very much like a hotel where guests stay in the host's property for a fee that is likely to be less than a hotel with concierge and other fringe benefits that the traveler may not need or want.
In New York City, landlords and property managers have been cracking down on tenants seeking to get in on the AirBnB action by subletting out their space for amounts exceeding their subsidized rent, in clear violation of the New York Landlord-Tenant Law. Recent decisions shed some light on why AirBnB, though seeing a growth in popularity, are facing many legal issues when the hosts is not the property owner.
Courts in New York have made it clear in recent decisions that rent-regulated tenants in New York cannot "profiteer" on their below-market tenancies by utilizing AirBnB's short-term stay model. One recent decision even found one NY tenant's conduct constituted "commercial exploitation" of a rent-regulated tenancy partially subsidized by government programs based upon facts presented showing the tenant's 135 rentals over the past year to transients - as an incurable violation of the Rent Control Law.
Basically, if the tenant acts like a hotel but does not follow the requirements in the law for safety that a hotel affords its guests, then the tenant is breaking the law, and can have their tenancy terminated without notice. Read more about this decision here.
Decisions like this show that (1) tenants trying to cash in on AirBnB may be needing to look for a new place to stay if they get caught by their landlord violating the law and (2) landlords should remain vigilant about who is coming and going from their properties. Landlords should consult an attorney if they suspect their tenant is using the rental as an AirBnB facility.
*Gene Berardelli may be contacted at: GeneBerardelli@ipglegal.com.
Gene is a New York street-smart attorney with an extreme passion for success. Gene specializes in litigation, arbitration and general corporate law for New York-based and international clients. He, also, is the host of a popular New York talk radio program.