Airbnb settles litigation with Miami development group alleging fraud

The lawsuits stem from a partnership between Airbnb and Harvey Hernandez’s company

Mar.March 11, 2020 02:30 PM
Harvey Herndandez

Harvey Herndandez

Two months ago, Airbnb alleged Miami developer Harvey Hernandez’s NGD Homesharing defrauded the short-term rental company in a partnership and stole $1 million. NGD struck back a few days later alleging Airbnb engaged in bad faith and breached its contract.

Now the two sides have settled and voluntarily dismissed both lawsuits, ending their litigation. Terms of the settlement were not disclosed.

The legal battle began in late January, when Airbnb filed a suit in Northern California claiming it invested $11 million in a partnership with Hernandez’s NGD to offer Airbnb-branded apartments.

NGD was supposed to open seven projects, but never opened one, the complaint stated. It further alleged that Hernandez siphoned off $1 million of the investment into another one of his projects, Natiivo in Miami, and disguised it as a loan.

A week later, Hernandez’s NGD Homesharing filed a counter suit in Miami-Dade County alleging that Airbnb engaged in a pattern of “disruptive, dilatory, tortious, and bad-faith actions inconsistent with, and in violation of, the legal and contractual obligations Airbnb owes to NGD.”

NGD’s lawsuit alleged that Airbnb was attempting to misappropriate NGD’s confidential business information, trade secrets and proprietary business methods for the benefit of Airbnb.

“I am happy this litigation is behind us and now it’s business as usual,” said founder and CEO Harvey Hernandez of NGD Homesharing, LLC, in a statement. “I look forward to continuing [to] work with Airbnb and other home sharing booking platforms in the future.”

Airbnb said in response to Herndanez statement. “Moving forward, our relationship with Mr. Hernandez and NGD/Niido/Natiivo will not mirror our prior operating relationship.”

After the settlement, NGD said that residents can rent out their apartments or condos on short-term rental platforms such as Airbnb, not unlike other buildings where individuals can list their units for short-term rentals.

NGD’s multifamily and hospitality properties, which operate through the Niido and Natiivo brands, have operations in Orlando, Nashville, Austin, and Miami.

Hernandez, who also leads the development firm Newgard Development Group, is partnering with Russell Galbut to build the Natiivo project in downtown Miami.

The project, designed by Arquitectonica with interiors by Urban Robot, will include 412 residential condos and 192 hotel rooms. Natiivo recently announced that it will be launching sales of office condos for the project planned at 159 Northeast Sixth Street in Miami. Natiivo is expected to break ground in the summer and open in late 2022, according to the spokesperson. The project is about 50 percent presold.

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