With the recent skyrocketing growth of companies like AirBnb and HomeAway, landlords have seen an uptick in illegal subletting activities in their buildings. If you didn’t already know, in the state of New York, it is illegal to rent out your apartment in a multi-unit building, for a period of less than thirty days if the tenant is not present. These laws date back to as early as 2010, far before the rise of AirBnb and the likes. Such restrictions were put into place as a means of protection, not only for landlords but also for other building tenants and even hotels. These regulations protect unfair competition to lawful hotels, protect landlords from fines and fees that can arise out of these illegal subletting activities and protect neighboring tenants from seeing their buildings become a hotel with a revolving door of new occupants. These laws also assist landlords in the eviction process. While many lease agreements advise tenants they must comply will all laws and statutes, including those involving subletting and roommates, the burden oftentimes falls on the landlord to make their case and can be a lengthy and expensive process for all involved.
In February of 2015, the New York City Housing Court found that the AirBnb subletting of a rent stabilized apartment fell under the classification of illegal profiteering and the landlord was awarded possession of the apartment and eviction of the tenant. The stabilized rent rate was $6,670 per month which is broken down to $219.29 per night. This tenant was advertising his apartment, only blocks from Times Square, for $649.00 per night. The tenant was noted to be giving evasive testimony, even going as far as to say he had no recollection if he ever collected money in exchange for someone staying at his apartment. The court found it was highly unlikely the tenant would have no recollection and coupled with the tenant’s lack of presented evidence, the court found in favor of the landlord. Not every case may have as favorable of an outcome or may have more hurdles to overcome on the road to eviction, which is why new laws are being passed to aid landlords in their fight against illegal subletting.
As of June 2017, NY Governor Andrew Cuomo signed a bill into law that would impose stricter regulations and punishments for those caught illegally subletting their apartments. This new law makes the act of just listing an advertisement for a non-occupied short term lease illegal. Fines imposed can be $1,000 and may reach up to $7,500 for those who break the new law. The hopes for this new law and the fines included is that it impedes the practice of illegal subletting before it reaches the point of the eviction process.
AirBnb has also made plans to help reduce illegal hotel situations. The company wants to be able to prevent people from buying up multiple properties and renting multiple listings in order to make a big profit. Despite these plans, AirBnb disagrees with the new legislation and, according to Business Insider, already has plans to file a lawsuit against the City of New York, NYC Mayor DeBlasio and Attorney General Eric Schneiderman. This lawsuit will be on the basis this new bill violates the Communications Decency Act as well as the First Amendment. Josh Meltzer, Head of New York Public Policy for AirBnb feels this was a back-room deal put together to support the hotel industry and their interests rather than the people of New York, from a statement given to Business Insider. Despite their efforts, the pre-existing laws will likely make it difficult for AirBnb to pursue their case. Many of the restrictions included in the new law were already prohibited and those involved say the bill is reasonable because of that.
The ongoing issue of illegal subletting is definitely one that should not be taken lightly.