The Real Deal New York

City sues Airbnb over subpoena it rejected

NYC seeks $1M in damages from two landlords peddling short-term rentals at 156 West 15th Street
By Will Parker | April 16, 2018 01:00PM

156 West 15th Street and Mayor Bill de Blasio (Credit: Getty Images)

Update: Apr. 16, 3:22 p.m.: City Hall attorneys filed suit against Airbnb on Monday, after the company refused to acquiesce a subpoena for short-term rental records at 156 West 15th Street in Manhattan.

Mayor Bill de Blasio’s Office of Special Enforcement was already seeking $1 million in damages from landlord Phillip Baldeo and an associate for leasing apartments for less than the 30-day minimum required by New York laws.

The office subpoenaed AirBnb for records related to those rentals in January, but Airbnb officially declined to cooperate with the subpoena the following month, citing the Stored Communications Act.

The OSE is calling on the court to force Airbnb to comply with the records requests plus penalties and costs.

“The City is experiencing an affordable housing crisis and we cannot lose apartments that are meant to be homes for New Yorkers,” said Christian Klossner, OSE’s executive director,  in a statement to The Real Deal. “We will not tolerate Airbnb impeding efforts to hold landlords and hosts fully responsible for turning rent-stabilized units in a Chelsea building into illegal hotel rooms.”

In a statement, a spokesperson for AirBnb said the group had  “raised concerns with the City about the specific scope of the subpoena used in this case,” but had also “already provided material to the City and stand ready to work with the City to respond appropriately to any future valid legal requests.”

Last year, the city stepped up its enforcement of illegal hotel laws by targeting property owners. The city sued Baldeo in January, the same month it settled with landlord Solly Assa for $1.2 million after it said he was responsible for illegal hotels at his Midtown buildings. In November it settled with landlords Majid and Hamid Kermanshahah on similar charges. And earlier this month, landlords Mina Guirguis and Szilvia Patkos were handed a $1 million judgement by the courts for their use of Airbnb.

Airbnb beat most performance projections last year when it turned a $93 million profit. But increasing regulations on short-term rentals in New York and elsewhere could pose serious risks to its future earnings. The City of Paris recently sued Airbnb for not incorporating its rental registration system into its listings.