Ticket to rent: Montauk homeowner racks up Airbnb fines

Maximum sentence includes $200K fine, jail time

64 South Elroy Drive in Montauk (Google Maps, iStock)
64 South Elroy Drive in Montauk (Google Maps, iStock)

UPDATED July 7, 2022, 11:38 a.m.: For some city dwellers who long dreamed of owning a Hamptons vacation home but were dissuaded by the expense, Airbnb became the financial bridge that made it possible. Short-term rentals through the platform could cover the mortgage and operating costs, yet leave enough time for the owners to enjoy the house on days it didn’t rent.

But East End towns were not so enamored of the concept. Renters who stayed for a month or the whole summer have long been part of the Hamptons culture, but not Airbnb customers who would come for a night or three, with a band of 20-somethings in tow. So local officials passed measures to curb the practice.

One Brooklynite and movie theater maven who tried the Airbnb approach in Montauk is learning that the hard way.

East Hampton Town has accused Harvey Elgart and his 64 S. Elroy LLC, the owner of 64 South Elroy Drive, of repeatedly violating the town’s rental registry law, the East Hampton Star reported. Elgart and the LLC have been slapped with no fewer than 57 tickets in the past nine months.

The town code allows a maximum of two rental stays that are shorter than two weeks in a six-month period. An investigation of Airbnb records, however, found the owners of the property rented it out a whopping 55 times over nine months beginning last May, collecting more than $100,000 in the process, according to the publication.

The consequences are potentially severe: The maximum penalty is more than $200,000 in fines and can include incarceration.

A number of towns in New York weekend communities on the East End and upstate have passed ordinances to curtail short-term rentals in response to complaints from neighbors about loud parties and other raucous behavior.

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Elgart and the LLC, registered to a Brooklyn address, are set to be arraigned at the beginning of August. It appears to be the same Harvey Elgart who for years has bought and restored old movie theaters in Cobble Hill, Williamsburg, Kew Gardens and Mamaroneck, and had ownership interests in other properties.

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The Real Deal tried Elgart at the Cobble Hill Cinemas, where an employee referred the inquiry to Elgart’s lawyer, Lawrence Kelly of Bayport, who has been fighting Montauk’s rental registry for years.

Kelly said by email that the town obtained the Airbnb records improperly and in any event, Elgart’s Montauk property is a cottage that was historically rented for short periods and should not be subject to the fines levied.

According to Behind the Hedges, the half-acre property in Montauk includes two units. Elgart purchased it in 2017 for $2.1 million and transferred the deed to the limited liability company in late 2020. From 2020 to 2021, the property was listed for rent at $20,000 per month.

The house appears to include two distinct living spaces. One has a kitchen and the other has a kitchenette with views of Fort Pond. There’s also an outdoor day bed and stairs that lead down to the pond.

In East Hampton, rental properties are required to be registered with the town. This year, the town created an additional category for seasonal renters that allows landlords to bypass a state law that blocked them from requiring more than one month’s rent to be paid upfront.

The new rules require owners to tell the town the names of tenants and how long they are staying. Owners must also submit proof of permanent residence. The town’s rental registry dates back to 2016.

This article has been updated with a response from Elgart’s attorney.

[East Hampton Star] — Holden Walter-Warner