Short-term apartment rentals ruled illegal

May 23, 2013 By Charisma L Miller, Esq. Brooklyn Daily Eagle

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It is a trend among some New Yorkers to rent a room or the use of their entire apartment to tourists looking for a unique New York experience. A judge in Manhattan has thwarted that effort, ruling against a New York apartment owner who temporarily rented his apartment on a popular traveler’s site.

East Village condo owner Nigel Warren was ordered to pay a $2,400 penalty for renting his apartment to a Russian tourist in December on the Airbnb.com website. At a hearing presided over by Administrative Law Judge Clive Morrick, Warren said that he was going out town for a week and placed a listing on Airbnb, an online travel site that allows users to temporarily rent their homes to tourists seeking a unique travel experience. Since his housemate would remain in the apartment, Warren did not believe he was in violation of any laws.

In an attempt to curb landlords from converting residential properties into illegal hotels, New York state enacted a law making it illegal to rent out a property for less than 29 days, with an exception for houseguests and shared spaces.

“The problem you have with short-term rentals is that there is no landlord/tenant relationship,” Brooklyn attorney Meryl Lisa Wenig, of Wenig Saltiel LLP, told the Brooklyn Daily Eagle. “You circumvent the whole purpose of a lease agreement.”

Warren argued that since a lawful tenant, his roommate, remained in the apartment during the tourist’s brief stay, the tourist merely shared the apartment space with Warren’s roommate. To satisfy the shared-space exception, Warren had to show that the tourist had “access to all parts of the dwelling,” Morrick noted. The tourist did not have access to Warren’s roommate’s bedroom; therefore the shared space exception did not apply.

Warren also attempted to cite the law’s exception for house guests, asserting that the Russian tourist was nothing more than his guest. Morrick rejected this argument, stating, “[The tourist] was a stranger and paid to occupy the apartment.”

In denying Warren the benefit of the shared household and houseguest exceptions, Merrick noted that these exceptions “do not apply to complete strangers who have no, and are not intended to have any, relationship with the permanent occupants.”

While temporary apartment rentals may assist New Yorkers in attaining supplemental income, there are significant liability issues that come into play with short-term rentals. “If you, the tenant, do not have a child, you are not, for example, required to have window guards,” Wenig explained. “However, if you rent your apartment to a tourist who has children, then you are in violation of the law requiring an apartment with children to have window guards.”

Wenig compared short-term apartment rentals to short-term car rentals. “When you rent a car, there is a lot of paperwork to fill out and documents, such as your driver’s license and the attaining of insurance, that need to be submitted. If you have the burden of documents and insurance to rent a car, you should have a similar burden to rent an apartment for a short period of time,” she said.

There is also a concern that the person to whom you are renting may pose a danger to the other residents in the building. “This is why there is an interview process to legally rent an apartment,” said Wenig.

The law does not prevent individuals from allowing acquaintances to house-sit when the tenant is on vacation. “People may have friends stay in their apartments while they are away,” Wenig advised. “This is not a rental. It is when you start charging money that issues are raised.”

Enforcement of the law preventing short-term rentals is problematic and often inconsistent. “Violations of the law are only brought to light when a complaint is filed with the Mayor’s Office of Special Enforcement,” acknowledged a spokesman for the city.

Airbnb has been lobbying for a change in the law. “There is universal agreement that occasional hosts like Nigel Warren were not the target of the … law, but that agreement provides little comfort to the handful of people, like Nigel, who find themselves targeted by overzealous enforcement officials,” the company said in a statement. “It is time to fix this law and protect hosts who occasionally rent out their own homes.”

In this battle between landlords and tenants, City Council Speaker Christine Quinn cites the need to find middle ground. “We need to balance creative ideas like Airbnb with the fact that illegal hotels are harmful to the fabric of New York City, and that is what we’re working toward,” she said.