Airbnb’s popularity has exploded and many people living in places like New York City have seen the potential to earn income by leasing their apartment or house to tourists through Airbnb. New York State and New York City have responded in the last few years by enacting laws to prohibit or discourage these arrangements. In July, the City Council passed a new bill, which was signed by the Mayor on August 6th. If you want to rent out an apartment through Airbnb or a similar platform, it is important to understand the legal landscape affecting short-term rentals in New York City.

Short-Term Rentals in New York State

New York State’s Multiple Dwelling Law prohibits short-term rentals in dwellings occupied by three or more families living independently of each other. Under the law, “Class A” dwellings (housing other than hotels and hostels) can only be leased for permanent residence purposes – i.e., 30 days or more. The law applies to an average New York City apartment building (but excludes a two-family house).

However, the law does not prohibit situations where the person leasing out the apartment is also occupying the unit at the same time. Therefore, you may rent out a room in your apartment as long as you are also there, but if you leave for vacation for two weeks, you cannot rent it to someone for those two weeks. The law also does not prohibit having short-term non-paying guests. However, if you live in a co-op or condominium, the building’s rules may restrict your ability to rent out a room or have non-paying guests.

Advertising your Short-Term Rental

In 2016, the Multiple Dwelling Law was amended to prohibit the advertising of an illegal short-term rental. Prohibited advertising includes any form of communication that is used to encourage, persuade or manipulate others into renting out your apartment, including text messages, flyers, signage and websites.

Those caught advertising pay $1,000 for the first violation, $5,000 for the second one and $7,500 for the third and subsequent violations. In New York City, the law is enforced by the Mayor’s Office of Special Enforcement.

Reporting Requirements in New York City

On August 6, 2018, the Mayor signed a law to amend Title 26 of the New York City Administrative Code to require a “booking service” to submit reports to the Mayor’s Office of Special Enforcement containing information regarding units advertised through their service.

A “booking service” applies to any person who (1) provides an online or application based platform that is used to list or advertise offers for short-term rentals and to either accept such offers, or reserve or pay for such rentals; and (2) charges, collects or receives a fee for the use of such a platform or for provision of any service in connection with a short-term rental.

The law does notapply to a platform that solely lists or advertises offers for short-term rentals. In other words, a website such as Craig’s List would not be considered a “booking service.” Hotels are expressly excluded from the law, which provides for a procedure to be added to a “list” of exempt hotels maintained by the Mayor’s Office of Special Enforcement.

A “booking service” must submit monthly reports that include the following information on each transaction (i.e., each short-term rental booked through its service):

• Address of the rental
• Name, address, phone and email of the host and the URL and host’s username
• URL and individualized name of the listing
• Whether the rental covered the whole unit or part of a unit
• Total number of days rented
• Fees received by the booking service
• If such booking service collects rent on behalf of the host, the amount paid for the rental and the account name and account number (anonymized, if possible) used by the host to receive rent.

Note that even if your short-term rental is LEGAL, the information will be reported to the City and may be publicly available via the Freedom of Information Law.

Now that the law has gone into effect, it is possible that booking services, such as Airbnb, will challenge the law. It is important to stay abreast of these developments if you are considering using a booking service to rent out an apartment or room. Contact usfor a consultation.