Mayor Adams makes the announcement about a lawsuit against an illegal short term rental operation. Image Credit: Ed Reed/Mayoral Photography Office.
The lawsuit alleges the owner conducted around $2 million in illegal transactions for short term rentals over the span of four years. On Monday, July 12, Mayor Eric Adams and Executive Director of the Mayor’s Office of Special Enforcement (OSE), Christian J. Klossner, held a press conference to announce a lawsuit against an illegal short-term rental operation in Manhattan’s Turtle Bay neighborhood. The administration officials were joined by Rich Maroko, president of the Hotel Trades Council, Council Members Keith Powers and Gail Brewer, Assembly Member Richard Gottfried, and members of the coalition against illegal hotels.
This is the first lawsuit brought using evidence obtained through the Booking Service Data Reporting Law. The law was passed in 2018 and requires all, “online, computer or application-based, platform[s],” that charge individuals or business entities to offer housing rentals, to provide the Office of Special Enforcement with information about transactions for rentals of fewer than 30 days for all listings that have five or more nights rented out per quarter. For every such transaction where a fee was accepted, the platforms are required to report the address of the rental, including apartment number, the name and address of the person offering the unit for rent, and information on the listing used to rent out the unit.
In this case, data provided by Airbnb led investigators to identify Arron Latimer, a licensed real estate broker, as running an illegal short-term rental operation out of 344 East 51st street. The building, which includes eight apartments, is designated Class A under the City’s Multiple Dwelling law. Class A buildings are specifically for permanent residence, as codified in a 2010 amendment to the law. The charge is that Latimer and associates used the apartments for short-term rentals, in violation of the building’s Class A status. The suit also charges Esther Yip, who owned the building through an LLC called Apex East Management, and the LLC itself, as being involved in the operation.
The City concluded that Latimer conducted about $2 million dollars in illegal transactions over the course of four years, with almost a million coming from units in the 51st street building. During that time, Latimer is alleged to have used at least 27 different host accounts and over 78 different listings in six different buildings.
While short-term rentals can be legal, they are highly regulated on the city and state level in order to prevent loss of the city’s already-scarce housing stock.
The city also alleges that Latimer defrauded and endangered his customers, citing the use of stock photography in the listings, guest reviews which said the addresses of the units were different than what had been listed, and multiple complaints of unsanitary conditions including dirty linens, mold, and blood. The 51st street building had been cited multiple times for violation of short-term rental regulations and safety codes. Assembly Member Richard Gottfried, who represents parts of central and western Manhattan and was a sponsor of a 2010 law targeting illegal hotels in residential buildings, talked about security concerns created by large numbers of transient guests having access to building keys, and the difference in building codes for apartment buildings and hotels.
“Safe, stable, and affordable housing is fundamental to a prosperous city, so we will not allow bad actors to deplete our housing stock and undermine our hospitality sector,” said Mayor Adams.
Director Klossner said, “This lawsuit underscores the necessity of robust reporting requirements for booking platforms, and why the city needs the short-term rental registration program that will take effect in 2023.”
Airbnb reached out to CityLand. According to Nathan Rotman, Airbnb Public Policy Regional Lead, “Airbnb banned the Host in question months ago, and we commend Mayor Adams for taking swift action on illegal hotel operators who flout the rules. Airbnb currently shares information with the City, and looks forward to working with the City and State to build an effective and transparent regulatory framework to differentiate between the responsible Hosts who should be protected under the law and operators of properties like this who have no place on our platform.”
The short-term rental registration law, which was in December of last year, will require those seeking to offer short-term rentals to register those rentals with the OSE. The OSE will then issue special registration numbers for each unit. Booking services will then be responsible for verifying the registration numbers against a city database. The law is set to go into effect in January of 2023.
By: Christopher Kipiniak (Christopher is a CityLaw intern and a New York Law School student, Class of 2024.)
OSE: “Mayor Adams Announces Office of Special Enforcement Lawsuit Against Illegal Short-Term Rental Operation” (July 12, 2022).
Update: (7/25) This article has been updated to reflect a statement from Airbnb.
Clearly this was warranted but was also an example of your government sucking off the hotel lobby. Where is there enforcement by NYC of DOB and ECB fines? HPD fines? Illegal rent overcharges? Not happening. But private police for donors? No problem in the Adams administration. CityLand should publish this and not genuflect to property interests.
let’s move in the homeless to our buildings. I rather have Airbnb then homeless living next to me