80 John Street
A Russian investment analyst could face jail time for allegedly illegally renting out her swank Art Deco-style Financial District condo, according to court papers spotted by the New York Post. The accused, Sophie Grishanova, a Columbia University graduate working for Privet Capital, has only 20 days to pay a $3,500 contempt fine and possibly an additional $15,000 attorneys’ fee, subject to court approval, or face incarceration. [more]
Airbnb’s Nathan Blecharczyk, Joe Gebbia and Brian Chesky
Principals of the hospitality website Airbnb, which allows homeowners or renters to lease their spaces to visitors on a short-term basis while out of town, are working to change local laws which make it difficult to use the site in New York, WNYC reported.
New York’s multiple dwelling law, which serves to make short-term rentals in large buildings illegal, was tightened in 2011 to curb the spread of illegal hotels in the city. Instead, it’s led to users of Airbnb being slapped with violations by city authorities for hosting strangers in their homes for short periods. In one instance, a man who rented his East Village walk-up to tourists last year for three nights is being fined $30,000. [more]
Mayor Michael Bloomberg
The city filed suit today in New York State Supreme Court against Smart Apartments, a large-scale operator of short-term rentals in more than 50 buildings in Manhattan and Brooklyn. The suit is the first ever brought by the city for deceptive trade practices against tourists, a representative for the Mayor’s office said.
The suit focuses on Smart Apartments’ alleged practice of booking and housing visitors in illegally-converted apartment buildings, a statement from the Mayor’s office said. The city is seeking $1 million in punitive damages and restitution for the affected tourists, among other damages. [more]
James Oddo, left; Erik Dilan, right; center, an illegal hotel at 318 W. 75th St. that was busted in May.
Even after Albany outlawed hotel uses in residential buildings last year, the practice made popular with services like Airbnb remains rampant, according to the findings of a new City Council report. So in an attempt to further curb short-term stays — which lawmakers say are dangerous and restrict the rental housing market — the City Council is expected to pass a law today vastly increasing fines for violators.
The Council’s Committee on Housing and Buildings, at a hearing this morning at 250 Broadway, approved the proposed law that would impose fines up to $25,000 for repeat violators. It will take effect 60 days after being signed into law. That’s much more severe than the state law passed in May 2010, which levies penalties between $800 and $2,400 per violation. [more]
From left: Robert Fried, an attorney with Jack Jaffa & Associates, Mayor Michael Bloomberg and 2610 Frederick Douglass Boulevard
The number of violations issued against residential landlords who illegally house temporary occupants in their apartment buildings has more than doubled in the wake of 2011 state legislation curbing illegal hotels, according to data provided to The Real Deal today by the office of Mayor Michael Bloomberg.
The administration’s Office of Special Enforcement task force issued 1,897 transient occupancy violations in 2011 – almost two-and-a-half times more than in 2010 – and about 96 percent, or 1,820 violations, have been issued since the law took effect in May 2011, the data through Dec. 31, 2011 show. [more]
More than 1,500 New Yorkers are raking in as much as $10,000 a month by illegally subletting their rental apartments, the New York Post reported, as many struggle to find their financial footing in the wake of the recession.
When Tony Chavez lost his job at a hedge fund, he realized he could make a $60,000-a-year profit just by moving out of his apartment, the Post said. He stayed at a friend’s house and started renting out his pad for between $250 and $350 per night.
Renters are required to obtain written permission from their landlords in order to sublet their apartment legally, according to New York State law, and cannot charge more than 10 percent above the current rent. For Class A units, it is also illegal to sublet them for less than 30 consecutive days. The main issue with illegally renting out an apartment is security, said Council member Gale Brewer.
“You have to be concerned about the comings and goings in the building, and you need to know who you’re renting to,” Brewer said. “If people need help making ends meet, they should work on getting a roommate.” … [more]
“The Departed” actor Robert “Toshi” Chan’s alleged illegal hotel empire is still going strong despite a new law solidifying statutes against transient occupancy, which went into effect in May. According to Chelsea Now, tourists are still staying illegally at 325 East 10th Street, 203 East 14th Street, 808 Drigg’s Avenue, 352 West 39th Street and 65 Bank Street. Despite those four Toshi properties being cited for violations earlier this year, Toshi’s general manager, Jason Montello, denied that the stays are illegal and claimed that the company had been unfairly victimized by the Bloomberg administration’s crackdown.
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The city has shuttered 15 illegal hotels since a new state law designed to root out short-term rentals took effect this month, Mayor Michael Bloomberg announced yesterday. According to the Post and the Associated Press, the hotels were the targets of a sting operation in Manhattan and Brooklyn that commenced May 1, when it became illegal to rent out apartments for less than 30 days in New York. All 15 hotels were forced to stop accepting guests, eight were issued vacate orders, and several were hit with fines of up to $2,500 for each building code violation found (among them: overcrowding, blocked exits and inadequate smoke alarms). … [more]
New York real estate brokers say demand for short-term leases has been intensifying recently, but a new law could soon infringe on their success. They blame the increased demand on a curious combination of economic vitality and caution. Employers are starting to hire again, so people are moving to the city and need short-term housing while they look for a permanent home, Gary Malin, president of Citi Habitats, told the New York Times. Simultaneously, employers and tourists are seeking ways to avoid hotel expenses. However, a state law scheduled to take effect next month will prohibit rentals of fewer than 30 days. Supporters of the bill, including the hotel industry and Mayor Michael Bloomberg, claim that it will assist in the crackdown on illegal hotels and preserve the quality of life and safety for permanent residents of apartment buildings. [NYT]… [more]
(Updated 2:42 p.m., July 27) Politicians cheered Governor David Paterson for signing into law an illegal … [more]
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