Landlords file first suits against Airbnb based on NYC’s new short-term rental law

Judge issues restraining order, which could pave way for landlords to collect

Landlords Sue Airbnb, Saying it Violated NYC Local Law 18
Airbnb's Brian Chesky (Getty)

Empowered by a new city law against short-term rentals, landlords are suing Airbnb and tenants who use it.

Two Upper West Side building owners have filed lawsuits against Airbnb and their tenants, claiming they are violating Local Law 18, which took effect last month.

The legislation — the latest effort to crack down on illegal short-term rentals — requires hosts to register their listings with the city so that platforms like Airbnb and Vrbo can verify their legitimacy before posting them.

Local Law 18 also allows landlords to put their buildings on a do-not-register list, which is supposed to block tenants from listing apartments on the sites. But the landlords who sued claim Airbnb continues to allow listings in their buildings, despite their inclusion on the list.

“There’s no real incentive [to comply with the law] other than these litigations,” said Robert Morgenstern, whose Canvas Property Group manages one of the buildings, 207 Columbus Avenue.

The judge in the case issued a temporary restraining order late last month directing Airbnb and the tenant to stop advertising the listing. Morgenstern’s attorney called it a landmark ruling that will allow other landlords to use the new law.

“The way these laws are written, it puts the burden on the landlords to enforce the law,” said Michael Pensabene of Rosenberg & Estis. “Airbnb continues to flout Local Law 18 . . . and in my experience, these hosts look to get away with as much as they can.”

Sign Up for the undefined Newsletter

By signing up, you agree to TheRealDeal Terms of Use and acknowledge the data practices in our Privacy Policy.

A spokesperson for Airbnb wrote in an email that the company relies on the city’s verification system to determine whether a listing is in compliance with the law. A representative for the city’s Office of Special Enforcement did not respond to a question on how it handled the two buildings in the lawsuits.

The second lawsuit was brought by Milstein Properties at 30 West 63rd Street

Landlords typically include clauses in their leases that ban tenants from renting out their apartments without the owner’s permission. Illegal rentals by tenants often annoy law-abiding tenants and leave building owners vulnerable to fines. But landlords inclined to stop such rentals have had no easy way to do so.

Local Law 18 was supposed to change that. The law not only provides a technological way to prevent illegal listings, but it also subjects violators to fines of up to $5,000.

The city’s regulation went into effect after Airbnb delayed it through litigation. The company sued in June, claiming the law was a de-facto ban on short-term rentals and violated previous agreements Airbnb had with the city.

The judge in the case disagreed and tossed the lawsuit in August, paving the way for the new rules to go into effect.

Read more