Nolita tenant accused by her own lawyers of fudging facts in short-term rental suit

Amy Parness, the Nolita tenant whose landlord accused her in court of raking in $500,000 by illegally subletting her apartment to scores of short-term guests, has lost her legal counsel after her own lawyers claimed she misrepresented facts in the case.

Landlord Ken Podziba filed suit against Parness in December 2011 in New York City Civil Court, claiming she made unauthorized alterations to the rental property at 250 Elizabeth Street, such as removing the radiator to put in baseboard heating and installing a washing machine.

Since then, Podziba said he discovered that she was also illegally subletting the apartment, as previously reported, through Airbnb and other short-term rental sites. (Though the apartment listing, dubbed “Nolita Nest” under the username Magdalena, has since been removed. Podziba sent The Real Deal screenshots of the listing.)

A screenshot of the “Noho Nest” listing on Airbnb

He also went as far as hiring a private detective to catch Parness in the act.

The allegedly illegal alterations and traffic in the apartment, a five-story walk-up and former tenement building constructed in 1925, present a health and safety hazard for other residents, Podziba claimed.

Parness told the judge that a recent tenant was her stepbrother visiting from out of town. In a Monday letter, addressed to the judge, lawyers from Himmelstein, McConnell, Gribben, Donoghue & Joseph, said Parness lied to her attorney about the tenant’s identity and apologized to the judge for the misrepresentation.

Sam Himmelstein, a partner at the firm, declined comment. Parness did not respond to emailed requests for comment, and a phone number was not available.

The case, which is far from resolved, represents the ongoing challenge of enforcing New York State’s illegal hotel law, which went into effect in 2010 and bars the rental of residential apartments for less than 30 days.

“It’s really hard for an honest landlord to get justice,” Podziba said. “We have a judge who is fair in housing court, but you never know.”

Though the Bloomberg administration has cracked down on landlords who flout the law, it remains difficult for building owners to go after their own tenants who break the rules, sources said.

The law, designed to give New York City more tools to stop rogue short-term subletters, doesn’t offer a clear mechanism for catching them in the act or proving illegal actions in court.

“[Landlords] will tell you that it’s very difficult and expensive” to catch tenants who are subletting illegally, said New York State Senator Liz Krueger, a sponsor of the 2010 bill. “That’s why I think the law we passed helps landlords, because it gives another opportunity for the city of New York to insert itself and use the tools we have to stop this from happening.”

However, on the landlord side, prosecuting the offender is an uphill battle from the beginning.

“First of all, you have to find out about it,” said Joe Burden, Podziba’s attorney and a partner with Belkin Burden Wenig & Goldman. “When the tenant says it’s just friends or relatives, how do you disprove that? You have to both get proof and disprove misrepresentations.”

And while there are laws in place that specifically forbid renters from profiting off short-term sublets, the rules on enforcement are fuzzy. Clearing that up, some say, is touchy because many politicians don’t want to get on the wrong side of the renting, voting public.

“City agencies and city government do not want to piss off rent-regulated tenants because there’s what, a million rent regulated tenants?” said Howard Stern, an attorney familiar with rent regulation laws. “So politically, who outvotes who?”

As for the rogue subletters, there appears to be strength in numbers. A recent search revealed more than 1,000 short-term Manhattan sublet listings on Airbnb, though finding consistent data or statistics about how many tenants are illegally subletting their units is difficult.

Plus, “even if a city agency was created, it would just be like welfare fraud – a question of available manpower versus the amount of fraud that’s taking place,” said Joann Kunda, owner of Rebus International, the private investigation firm that Podziba hired in the Parness case.

To catch illegal subletters in the act, moves like hiring a private investigator are necessary, Kunda said.

“You see it on the website and you know that’s your apartment being advertised there, but we go in and we actually exchange the money, document the interior of the apt, videotape speaking to the individual for the key exchange,” she explained. “We’ve had people say on tape, ‘Don’t let anybody know that you got this through Airbnb. If anybody asks questions, you say you’re my cousin from out of town.’”

In Podziba’s case, a judge will rule on Aug. 12 on the landlord’s motion to bar Parness from further sublets. The whole process has made him a vocal advocate of correcting pervasive tenant violations, and he said he will donate proceeds from the court case to charity, should he come out on top.

“If we lose our case then it’s open season for anyone who wants to have an illegal hotel operation from their apartment,” Podziba said. “There should be severe penalties when someone’s caught, not just a slap on the wrist.”