Tenant Evicted with No Chance to Cure After Profiteering with Airbnb
Back in December, an Upper West Side woman accused of earning thousands of dollars by renting her rent-controlled duplex on Airbnb was ordered to stop by a Manhattan judge. And in January of this year, apartment-sharing websites including Airbnb were taken to task by City Council members who argued that these companies compromise tenants’ safety, endanger an already limited housing stock, and flout state law.
Most recently, a Manhattan Housing Court judge ruled that rent-stabilized tenants can’t use a residential apartment as a hotel room and profit from it on websites such as Airbnb [42nd and 10th Assoc. LLC v. Ikezi, Feb. 2015]. The judge ordered the tenant evicted from his discounted two-bedroom penthouse by the end of the month.
The owner’s employee testified that she spoke with a person who claimed to have rented the tenant’s apartment on Airbnb shortly after the tenant’s lease began. She also testified that she found an advertisement placed with Airbnb and, when she spoke with the tenant about the advertisement, he responded by saying that he could do whatever he wanted and that he wasn’t going to remove the ad.
The Airbnb ad touted the unit’s “skyline views” in “the hippest, hottest, most happening neighborhood in Manhattan.” The charge for the room was $649 and the ad stated a check-in time of 4 p.m. and a check-out time of 11 a.m. It also listed additional charges of $95 per extra guest and a $150 cleaning fee.
When confronted about the ad, the tenant claimed that it might be an upstairs neighbor’s pad with similar furnishings. Ultimately, the judge discounted the tenant’s evasive testimony and wrote that he benefited from a discounted rent because his building receives a 421-a tax exemption. “Using a residential apartment as a hotel room and profiteering off of it is ground for eviction and is incurable, as it undermines a purpose of the Rent Stabilization Code,” the judge wrote. The tenant paid only about two-thirds of the apartment’s $9,000-plus market price, or $6,670 a month, or a daily rate of $219.29, because it was rent stabilized. He then listed it online for $649 a night. As a result, the judge concluded the tenant profiteered from this activity by renting out the apartment for triple what he pays the owner.
The ruling is the first to outright evict a tenant under rent controls without giving a chance to cure. In addition, the judge ruled that since the tenant’s infraction was incurable, the owner wasn’t required to serve the tenant with a notice to cure. It’s important to note that while the Housing Court’s decision isn’t considered case law, it can be cited in rulings against similar would-be Airbnb users.
In the wake of the ruling, State Senator Liz Krueger and City Council Member Jumaane D. Williams released a joint statement applauding the judge for the ruling. “With a housing vacancy rate of only 3.12 percent, steadily increasing rents, and widespread income stagnation, New York City is in a housing crisis. Short-term apartment rental websites like Airbnb account for more than 14,000 illegal rentals in the five boroughs, reducing the number of units available to regular New Yorkers, and making the crisis that much worse,” said Krueger and Williams in the statement.
“We hope to combat such behavior by bolstering and expanding the resources and strategies of city agencies to enforce existing laws and penalize violators, putting those who are converting housing into illegal hotels out of business,” they added.