A top Corcoran broker filed — and quickly withdrew — a $20.4 million suit this week, alleging that the firm had banned her from doing business with the Link, a luxury West Side condo after the building’s board claimed that she marketed short-term rentals at the property against its rules and against city law.
Katherine McFarland, an associate broker and a top-producing member of Corcoran’s Million Dollar Club since 2010, filed suit Sept. 24 in New York State Supreme Court alleging that she was banned from further business at the 310 West 52nd Street tower after she listed for sale apartments at the building with per night or per month rental prices.
McFarland alleged that the ban was triggered by a listing for apartment 37J at the building for $327 a night or $9,800 a month, however she claimed that the listing was based on a 12-month lease period and was misinterpreted by the building’s board. McFarland declined comment on the case, but confirmed that the ban on her was lifted after she filed and later withdrew the case the following day.
“I still can sell and rent in the building,” McFarland, who lived at the building before selling her unit in 2009, told The Real Deal.
The suit comes as the New York City Council is weighing a move to raise fines for illegal hotels, in which private apartments are used as short-term rentals by transient guests. Proposed legislation could raise the penalty for repeat violations to $25,000.
Condos and apartment owners often used these services to bring in additional revenue when the rental and sales markets were weak. The practice has faced increased opposition by tenants and condo owners who fear the safety and value of their buildings are being jeopardized by such practices.
Lawyers for the Link said that any unit owner leasing out an apartment needs to submit the potential tenant for board approval. ”Whenever you lease or sell your unit you need to complete an application package for waiver of right of first refusal,” said Kelly Ringston, an attorney at Braverman & Associates, which represents the condo board. “We had people moving in without submitting any application package.”
Ringston also said that the board has filed a complaint with the state licensing board about McFarland’s activities.
According to the state Division of Licensing, McFarland is properly licensed through March 2014.
The dispute followed a 2011 incident in which state Supreme Court Judge Carol Edmead banned a unit owner at the Link from leasing his apartment to a Manhattan couple for 60 days. According to the 2011 lawsuit, the board alleged that the unit owner entered a deal to lease the unit for 60 days without prior approval, and that McFarland told Cooper Square Realty, the building’s management firm, that the couple were just “guests” of the unit owner and not renting the space.
McFarland, in her suit filed Monday, alleges that the building had previously approved numerous short-term rentals, including one to comedian Dane Cook. Cook’s publicist did not return calls.
She also said several claims made against her in the 2011 dispute were false. In addition, she alleged that Corcoran should have provided her with legal counsel, but failed to do so.
Corcoran, in an emailed statement, said that “the plaintiff withdrew the complaint as to Corcoran and the Board of Managers of 310 West 52nd Street.”