City Council Passes Bill to Further Regulate Short-Term Rentals

On Dec. 9, 2021, the City Council voted to approve Int. 2309-A, which requires short-term rentals to register with the Mayor’s Office of Special Enforcement. The bill would for the first time require hosts to register with the city before renting out their homes on a short-term basis or for less than 30 days. It’s intended to prevent the listing of illegal short-term rentals on sites such as Airbnb.

Under New York State’s Multiple Dwelling Law, it’s already illegal to temporarily rent out a full apartment for fewer than 30 days if the owner or tenant is not present. The law draws a clear 30-day line that differentiates permanent from transient occupancy. By defining and banning transient occupancy for Class A residential apartments, the law prevents owners and tenants from entering into short-term tenancies with out-of-town guests who are prone to create noise, safety, and security hazards in areas zoned for residential communities. And, due to a state law passed in 2016, it’s illegal to advertise an apartment in a Class A multiple dwelling for rent for 30 days or less.

The Mayor’s Office of Special Enforcement helps ensure compliance with short-term rental rules. The new bill will require applicants who want to rent out rooms in Class A dwellings for less than 30 consecutive days as short-term rentals to register with the Mayor’s Office of Special Enforcement. The office will issue a registration number before the applicant will be permitted to rent out rooms.

To ensure compliance, the legislation also requires booking platforms to verify the registration number of any accommodation before listing it on their service. Fines for hosts who fail to abide by the rule would be up to $5,000, and platforms like Airbnb would be fined $1,500 for every illegal transaction.

Mayor de Blasio supports the bill, and the rules will take effect 12 months after the legislation becomes law, except for the provisions permitting enforcement against hosts and booking services, which take effect in 16 months.

Three Grounds for Evicting Tenants

Running a Short-Term Rental Business

Even with the impending registration requirement, motivated tenants may find a way to bypass requirements and still attempt to conduct a vacation rental business. New short-term rental sites may appear or tenants may be bold enough to register anyway. If you suspect a tenant of running a business of renting out the apartment, you should consult an attorney about the best way to proceed. Depending on the circumstances, an attorney may advise a few different ways to pursue an eviction.

Breach of lease. Check to see if your lease prohibits the apartment from being used by any person on a transient basis, such as use as a hotel, motel, dormitory, or rooming house. If you’ve built a strong enough case, this may be your best rationale for an eviction. Under NYS Real Property Actions and Proceedings Law (RPAPL) Section 753(4), a tenant has 10 days to cure the breach of a lease provision. If you’re able to prove that a vibrant rental business that goes against the residential requirements of the lease has been established, the tenant won’t be able to fix the violation within 10 days.

Illegal subletting. Section 2524.3(h) of the Rent Stabilization Code permits termination in the event of a sublet in violation of Section 2525.6 of the code. Thus, if the tenant sublets without complying with Real Property Law 226-b, it’s a ground for eviction. If a tenant sublets a rent-stabilized apartment for a substantial profit, it can be considered a noncurable breach of the tenancy, entitling the owner to evict.

With regard to the 10-day cure period for breach of the tenancy, the concern is that the tenant will be able to say that the violation has been cured as soon as the weekend tourist has left the apartment. In some cases, profiteering can be a ground for eviction without providing the usual 10-day cure period.

Nonprimary residence. To be entitled to rent protection, a rent-stabilized apartment must be a tenant’s primary residence. Rent Stabilization Code Section 2520.11(k) excludes from protection “housing accommodations which are not occupied by the tenant, not including subtenants or occupants, as his or her primary residence as determined by a court of competent jurisdiction.”

If you can show that a tenant is living fewer than 183 days a year in the apartment and making money on short-term and long-term rentals on those absent days, your attorney may advise you to pursue a nonprimary residence holdover proceeding to obtain possession of the apartment.