Short-term rental company sued for $1.5M in unpaid rent

LuxUrban says allegations in all seven lawsuits are nonsense

25 East 67th Street in Lenox Hill and LuxUrban Hotels’ Brian Ferdinand (Google Maps, Crunchbase)
25 East 67th Street in Lenox Hill and LuxUrban Hotels’ Brian Ferdinand (Google Maps, Crunchbase)

A Miami-based short term rental company and its CEO are being sued for more than a million dollars after allegedly skipping out on rent at apartments across New York City.

Landlords filed seven complaints Tuesday against LuxUrban Hotels, which until last month was known as CorpHousing Group, and its CEO Brian Ferdinand for about $1.5 million in unpaid rent and other expenses stemming from 20 units that the firm allegedly rented in Manhattan and northern Brooklyn.

The plaintiffs in each of the complaints are separate entities, some but not all of which are registered to an address that matches Josh Gotlib’s Black Spruce Management. All of them are represented by Fox Rothschild attorneys Richard Scharlat and Bansari Sheth, who declined to comment.

Each of the landlords accuse LuxUrban of essentially the same thing: renting units in their buildings in the early months of the pandemic and then almost immediately failing to pay rent. After defaulting on the leases, the complaints allege, LuxUrban would eventually vacate the units before the leases were up.

Ferdinand was the guarantor on five of the leases, but never made good on the outstanding rent payments and costs incurred by the landlords, according to the complaints.

185 Hester Street in Little Italy (Google Maps)

185 Hester Street in Little Italy (Google Maps)

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At 185 Hester Street in Little Italy, the firm allegedly stuck its landlord with nearly $53,000 in fines after subletting the space to another occupant for less than 30 days, violating both the lease and city short-term rental law.

In a statement, LuxUrban called the accusations meritless and said the landlords entered into a surrender and release agreement when the firm ended a joint venture with Gotlib and Black Spruce Management. The company denied that any damages are due and said it plans to file a counter action to have the lawsuits dismissed.

The largest bill is at Black Spruce’s 25 East 67th Street, where the ownership entity says LuxUrban is on the hook for roughly $939,000 in damages after renting 12 units there. The company allegedly continued to occupy one of the units until February of this year, despite failing to pay rent after June 2020.

The complaint alleges LuxUrban violated its lease in another unit by putting up walls to create an additional bedroom and allowing others who weren’t on the lease to occupy the space. The Department of Buildings fined the landlord $7,500 for the violation, according to the complaint.

The lawsuit comes three months after LuxUrban signed two 15-year master leases at a pair of Manhattan hotels, including the 124-key Tuscany Hotel in Murray Hill at 120 East 39th Street. The company’s Manhattan portfolio also includes The Blakely Hotel at 136 West 55th Street, The Marriott Herald Hotel at 71 West 35th Street, The Washington Hotel in Lower Manhattan at 123 Washington Street and the Rebel Hotel at 10 West 18th Street in Flatiron.