Anyone hoping to find a cheap place to stay during their next visit to New York will have limited options on Airbnb.
In June 2016, the New York state legislature passed a law that strengthened the city’s existing rules on short-term property listings. Since 2010, it has been illegal to rent out apartments for less than 30 days. Would-be hosts who are found promoting a short-term apartment rental on a site like Airbnb face a fine of $1,000 for a first violation, $5,000 for the second, and $7,500 for every subsequent violation.
The Difference is in the Hosting
There are two types of Airbnb rentals: unhosted and hosted. Hosted rentals are ones where the owner may rent out just a room or an area of their property while they live there, and the guest doesn’t have access to the whole property. With unhosted rentals, the entire property is at the disposal of the guest(s).
The New York State Multiple Dwelling Law (MDL) prohibits unhosted rentals in a “Class A” building, which is a building occupied by three or more families who live independently of one another. These buildings may only contain permanent residents, and cannot not be rented out for less than 30 days unless a “permanent resident” remains on the premises (i.e. the property has to be hosted). It is important to note that such a resident must be a human being and not a corporate host.
The MDL however does permit the following Airbnb-type rentals:
- Short-term rentals where the host remains on the premises, provided the guest has access to the entire unit
- Short-term rentals in private family homes
- Rentals that exceed 30 days
Hosts whose properties meet one or more of the criteria above may be compliant with the MDL, but they could violate other city housing laws.
Certificate of Occupancy Requirements
Residential properties in the city of New York are required to have a certificate that states the occupancy and legal use of the building. If its occupancy changes from long-term residential to casual rental, the certificate must be amended, followed by a city inspection to confirm that the property meets the required occupancy standards for transient rental use. This includes compliance with the stricter fire and building codes aimed at this type of occupancy.
Under the city zoning code, transient rental buildings may be located only in certain areas. Violations can be punished by significant fines.
Under most residential leases, tenants may not sublet their units without landlord approval. Engaging in unauthorized short-term rentals can result in eviction proceedings.
Co-op and Condo Rules
Co-ops and condominiums generally prohibit or limit short-term rentals, especially in newer buildings. Violations could result in fines and other penalties.
Short-term rental may not be permitted in stabilized or rent controlled housing. Violations can result in fines and even eviction, so prospective hosts need to contact their local rent board for approval first.
Prospective hosts in New York City may also be required to obtain a special permit or license to operate a business within the city limits, as well as pay various sales and hotel-related taxes. Airbnb does not collect or remit these taxes, so hosts must do it themselves.
If you are thinking about making your home, condo, or apartment available as a short-term rental in New York, contact Rosen Law. We will review your business plan and advise you on potential compliance issues, so that your debut as a host is not impacted by legal consequences.