By REBNY President John Banks
Last week, the New York State Legislature took an important step in providing the tools for better enforcement of illegal short-term rentals in New York City.
Specifically, the State Senate and Assembly passed legislation that would fine any person who advertises an apartment for purposes that would violate the State’s Multiple Dwellings Law (MDL).
The MDL prohibits the rental of dwelling units in multi-family rental buildings for fewer than 30 days without the tenant or owner being present.
To be clear, the legislation in no way impedes the legal use of such sharing services that facilitate short-term rentals. It will, however, make it more difficult for bad actors to solicit unwitting participants in their illegal activity.
Properly enforced, this legislation will protect New York City’s stock of rental housing and will strengthen the City’s hotel industry and the important, good jobs it creates.
We commend State Senate Leader John Flanagan, Assembly Speaker Carl Heastie, Senator Andrew Lanza, and Assembly Member Linda Rosenthal for their leadership in passing sensible legislation.
REBNY has consistently taken issue with how parties are held accountable for this type of illegal rental — specifically, existing laws and enforcement policies consider building owners responsible for a violation of the MDL, regardless of whether or not they were responsible for its occurrence.
This lack of legislative clarity has led to several instances in which a landlord — many of whom are taking significant action to prevent illegal short-term rentals within their properties — have been left footing the bill when residents in one of his or her buildings has been caught engaging in illegal short-term sublets.
One recent example involved a building owner who received roughly $60,000 in fines after their tenants were found to be using Airbnb to rent out their apartments.
We need to make sure that fines are assessed against the person actually breaking the law, regardless of who he or she is, and this bill helps reach that goal.
Short-term sublets of apartments for fewer than 30 days is a practice that is not only illegal in many cases, but also raises safety concerns, increases wear and tear costs, and creates quality of life problems in buildings throughout the city.
Websites that facilitate the “sharing economy” are largely responsible for the increase in this activity in recent years, and it is through common-sense clarifications of laws and regulations — as well as increased education and transparency on both sides — that we can mitigate the negative effects that illegal short-term rentals are having on New York.
The immediate concern surrounding this issue is the question of safety.
Owners of residential properties are primarily tasked with ensuring that their buildings are in compliance with all applicable laws and regulations that protect the well-being of residents.
This includes providing information to residents so that they understand the correct procedure in the event of an emergency, such as a fire or natural disaster.
When an apartment has been illegally sublet, not only are the short-term tenants unlikely to be unaware of these safety procedures, but if there are more occupants in the unit or building than are legally allowed, then the existing safety requirements may no longer be sufficient to ensure safety in the event of an emergency.
In addition to the safety issues, another major concern is the nuisance caused to residents and the additional burden they put on the building and its staff.
In apartment buildings with a high amount of this activity, more and more landlords and property managers are hearing complaints from their tenants regarding excessive noise and activity at inappropriate hours, as well as security concerns about not knowing who their neighbors are and who has access to their building.
Finally, additional building staff time is needed to monitor all the extra short-term arrivals and departures (taking them away from their primary work duties), and the additional short-term tenants drastically increase wear-and-tear costs for the building.
These concerns are being addressed by the real estate industry. REBNY is working to make illegal short-term rentals more difficult by educating our members and calling for increased transparency from websites that provide sharing services.
By informing as many building owners and managers as possible of the intricacies of the laws surrounding illegal subletting, that information will be passed onto tenants, who will hopefully be more careful and responsible when using short-term rental services.
Increased transparency from the sites that facilitate these uses will allow owners and managers to become aware of illegal sublets more quickly, and work with residents and enforcement agencies to end them.
Companies that promote the “sharing economy” have been vocal about working towards increased transparency and prioritizing safety for those using their services, but they have taken few, if any, substantive measures to provide increased transparency.
In order for these short-term rental services to peacefully coexist with New York City’s real estate industry, they simply must find a way to do so without violating the law.
In other REBNY News:
REBNY’s next Residential Rental Clinic seminar will be on June 24 from 9:30 a.m. to 10:30 a.m. in the Mendik Education Center. Presented by Dan Marrello of Town Fifth Avenue and Gary Kiyan of Perfect RE Solutions, this interactive seminar will give REBNY members insightful tips and tricks to accelerating and expanding their practice, and also present the opportunity to network with others in the field. To register, contact Yesenia Dhanraj at YDhanraj@rebny.com.
REBNY’s Willis Captives & Risk Finance Discussion will be on June 28 from 3 p.m. to 6 p.m. in the Mendik Education Center. This session will contain a concise, logical, and objective overview of the issue of how captive insurance companies really work, what benefits they can deliver, and how they can be used effectively. It will also contrast the realistic opportunities of construction-focused captive programs with the issues and technical considerations that must be vetted before choosing the captive path. To register, visit www.rebny.com or contact Ossie Shemtov at OShemtov@rebny.com.
REBNY’s 8th Annual Summer Donation Drive is officially underway! This year, we’re working with The Bowery Mission to serve homeless and hungry New Yorkers. Now through September 9, REBNY’s members are encouraged to donate soap, shampoo, conditioner, toothpaste, shaving cream and more items to help restore dignity and respect to our city’s homeless community.v