Judge Greenlights Plan to Take Control of Owner’s Buildings for Illegal Airbnb Activity

A state appellate court recently approved the city’s plan to take over an owner’s properties after he allegedly failed to prevent his tenants from “Airbnb-ing” their apartments. In August, a Manhattan Supreme Court judge found the owner of several Midtown rental buildings guilty of contempt of court after a two-year-long legal battle with the City of New York.

The city had originally sued the owner in early 2015 for allowing illegal hotel activity to occur in his buildings. When DOB inspectors came by in 2016, they discovered a few more tenants illegally subletting their apartments to travelers on a short-term basis. Those violations became the foundation of the contempt judgment handed down in August, and as punishment, the judge stripped away the owner’s legal control over his buildings.

Although the owner’s lawyers asked the appellate court for a stay of enforcement to prevent that process from going forward, the appellate court recently denied the stay. However, their appeal against the contempt judgement will go forward in court.

Now the state court will appoint a receiver to manage the two properties at the center of the lawsuit. The receiver will operate the two buildings and collect rents.

Over the past three years, the city has sued a handful of property owners who racked up the most illegal hotel complaints, typically filed by tenants or neighbors. In an effort to crack down on illegal short-term (less than 30-day) rentals in residential buildings, the mayor committed $2.9 million to the Mayor’s Office of Special Enforcement and added 16 staffers to the 32-person agency earlier this year. Although OSE was originally created to tackle issues like drug dealing and prostitution, it now focuses most of its efforts on owners and tenants violating the state’s anti-Airbnb laws.