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City Granted Injunction Against Use of Unit for Airbnb; Court’s Rationale May Assist Private Plaintiffs as Well

Prior issues of this Client Advisory have reported on efforts by property owners, including cooperatives and condominiums, to prevent unlawful renting out of units in their buildings to short-term transient occupants through services such as Airbnb.  The City of New York has also attempted to enforce provisions of law and regulation barring such use in properties designated for residential as opposed to transient use.

In City of New York v. Baldeo, 2019 NYLJ LEXIS 860, Index No. 450126/2018 (Sup. Ct. N.Y. Co. Mar. 15, 2019), the City asserted that defendant property owners were improperly permitting residential units to be used for transient or hotel purposes.  The City asserted that such misuse of the premises violated multiple provisions of laws and regulations including the New York City Administrative Code (“Code”) and the Multiple Dwelling Law (“MDL”).  The subject premises were a four-story walkup building comprising nine or ten apartments.  The City asserted that use of the premises for transient stays of less than 30 days violated the Code and the MDL “as an illegal conversion, an illegal occupancy, and an unsafe condition due to increased fire safety risks and other public health issues.”  The complaint further alleged that the apartments were regularly advertised on Airbnb for stays as short as one day, in ads that specified “check-in” and “check-out” times as if the premises were a hotel.  The City contended that since first receiving complaints of transient use, loud noise, and drug use at the premises in 2014, the City inspected the premises four times and found that several units were repeatedly occupied by tourists in transient occupancy.  Further, the City noted that the premises were designated as rent-stabilized, meaning that using the apartments for transients made them unavailable to provide affordable housing to New Yorkers.

The City sought a preliminary injunction to enjoin defendants from permitting any illegal use or occupancy of the premises and from advertising the units for any such illegal use or occupancy.  The court noted that a municipality seeking injunctive relief in a nuisance abatement proceeding need not meet the higher standards that would apply to a private party seeking such relief.  In this case, however, the court found that the City had met even the higher standards.  The court reviewed the specific provisions of the MDL and Code at issue and found that defendants had repeatedly violated all of them, warranting the granting of the injunction that the City sought.

Defendants did not challenge the facts alleged by the City, but asserted that the MDL provisions were unconstitutional on a variety of grounds.  These arguments, “based principally on hyperbole,” were rejected.  Defendants further argued that they were not personally responsible for the illegal rentals.  However, as the property owners, defendants were responsible for ensuring that their premises were not used unlawfully; in any event, “it seems inconceivable that at least two-thirds of the units in the Premises were used for transient occupancy without the building owner’s knowledge, or at least willful blindness,” especially after the first inspection resulted in the issuance of several violations.