Friday, May 31, 2013

Big Apple Environmental Control Board Invokes Local 'Hotel Law' To Belt Tenant With $2400 Fine For 3-Day 'Sub-Rental' To Another; Controversy Grows Over Private Individuals Using Popular Listing Service To Peddle Short-Stays In Their Homes To Tourists, Others Seeking Temporary Accomodations That Undercut Hotel Rate$

In New York City, reports:

  • New York officials have determined that a man who rented out part of his apartment on Airbnb(1) should pay $2,400 for violating the city's illegal hotel law, despite Airbnb stepping in on the host's behalf.

    The city initially asked host Nigel Warren to pay $7,000 total in fees for violating a law that makes it illegal for property owners to rent out homes temporarily -- essentially mimicking hotel stays -- and for unrelated issues with building and zoning codes, according to the decision and order issued by the board.

    The city argued that the apartment "may only be used as private residences and may not be rented for transient, hotel, or motel purposes."

    As Airbnb continues to shake things up for the hotel industry, it's increasingly running into issues with the law, particularly in areas where the law is not clear cut. It's not just in New York -- officials in the company's hometown of San Francisco are concerned about property owners potentially using its service to get around local tenant protections and land use codes.

    The New York case is centered around a 2011 law that makes it illegal for New York residents to rent out a property for less than 29 days. It was originally aimed at landlords who bought up residential properties and turned them into hotels. Airbnb has been lobbying legislators to change the law so it clearly protects hosts, like Warren, who are not trying to turn their homes into hotels.

    For Warren's case, Administrative Law Judge Clive Morrick dismissed the building and zoning code violations but agreed that Warren did violate the illegal hotel law. He lowered the fee total to $2,400.

    "While breech of the condominium rules is not of itself a ground for sustaining this (notice), respondent was in breach (through Warren's acts) and the existence of the rule against rental for transient, hotel, or motel purposes is evidence that the unit owners were to restrict their use to permanent occupation," Morrick wrote.

    Airbnb issued a statement to CNET, saying it was disappointed in Morrick's decision:

    This decision runs contrary to the stated intention and the plain text of New York law, so obviously we are disappointed. But more importantly, this decision makes it even more critical that New York law be clarified to make sure regular New Yorkers can occasionally rent out their own homes.

    There is universal agreement that occasional hosts like Nigel Warren were not the target of the 2010 law, but that agreement provides little comfort to the handful of people, like Nigel, who find themselves targeted by overzealous enforcement officials.

    It is time to fix this law and protect hosts who occasionally rent out their own homes. Eighty-seven percent of Airbnb hosts in New York list just a home they live in -- they are average New Yorkers trying to make ends meet, not illegal hotels that should be subject to the 2010 law

    Warren's landlord has 30 days from May 14, the date the decision was mailed, to appeal the decision, according to the Environmental Control Board, which oversaw the case. The board reviews cases related to regulations that "protect the city's health, safety, and clean environment."
  • The case started in September when Warren rented his condo to a woman for a three-day stay. His housemate was also living at the apartment at the time, according to the hearing testimony, outlined in the document. He's used Airbnb for rentals twice before.

    Airbnb stepped in at Warren's hearing on May 9 to argue that his case should be an exception to the New York law. Airbnb argued that "allowing such transient use supports the city's desire to preserve living accommodations because it allows tenant the ability to bolster their income and pay rent."
  • Now, this doesn't necessarily mean New York will crack down on all Airbnb hosts. The city enforces this regulation when a complaint is filed. It's not clear why officials zeroed in on Warren's situation. But this has to have Airbnb worried about concerned customers, particularly because the company can't formally do anything about Warren's case. Airbnb's only recourse is to change the law.
For the story, see NY official: Airbnb stay illegal; host fined $2,400 (An administrative law judge decides that a man leasing a condo broke New York's laws after he rented out part of his home on Airbnb).

See also WNYC Radio 93.9 FM and AM 820: NYC Tells Airbnb Hosts: Don’t Get Too Cozy.

For the NYC Environmental Control Board ruling and order, see In re Abe Carrey (May 9, 2013).

(1) Airbnb is an online service that provides a platform for individuals referred to as “hosts”, generally private parties, to rent unoccupied living space and other short-term lodging to guests. I think I'm somewhat reliably informed that this outfit was first known as Air Bed and Breakfast (; the name subsequently being shortened to Airbnb (pronounced 'Air B-N-B').

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