Landlords who used Airbnb to list illegal hotel settle with city for $1M

Majid and Hamid Kermanshah listed units at 59 Fifth Avenue and 5 West 31st Street on Airbnb

5 West 31st Street
5 West 31st Street

The hits in New York’s Airbnb crackdown keep on coming.

The city had sued a pair of property owners for running an illegal hotel that it listed on sites like Airbnb, and it has now settled with them for $1 million, according to the New York Daily News.

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Landlords Majid and Hamid Kermanshah had listed units in residential buildings at 59 Fifth Avenue and 5 West 31st Street on Airbnb under the names “Contemporary Design Suites” and “Urban Oasis Hostel.” It is illegal in New York to rent an apartment out for less than 30 days and to advertise doing so, which has put Airbnb in a tough position.

The Kermanshahs will ultimately only need to pay the city $201,500, as officials will credit the remaining $798,500 in rent that they were unable to collect during the proceedings to the $1 million. The landlords will pay off the $201,500 in $6,500 monthly installments.

The city has previously fined landlord Pearl Chan for illegally cramming dozens of Airbnb guests into her Bedford-Stuyvesant townhouse at 381 Nostrand Avenue and Bushwick landlord George Lebovits after an Airbnb user shoved 34 guests into his building at 19 Fayette Street.  [NYDN]Eddie Small