If Short-Term Rentals Are Illegal, How Does My Neighbor Get Away With It?

Q: I live in a midsize co-op building in the West Village. A rent-stabilized tenant on the first floor had listed a room in her apartment on Airbnb for years, until such rentals were prohibited. We also registered our building on the city’s prohibited buildings list. Her Airbnb listing was removed, but she continues to rent out a room (or the whole apartment, we’re not sure) on Facebook Marketplace. We’ve shared this information with the apartment’s sponsor and several others in our building. The sponsor hasn’t told the tenant to stop this illegal practice. What rights does the co-op have here? Can we evict the tenant, or take action against the sponsor?

A: New York City’s laws restricting short-term rentals took effect in September. Your co-op’s place on the city’s prohibited buildings list and this apartment’s rent-stabilized status make short-term rentals in this unit illegal.

To put a stop to it in your building, you can simultaneously alert the city, the unit sponsor, and the offending tenant.

Report the continued rental activity to 311, including any evidence you have, such as online listings. These complaints are handled by the Mayor’s Office of Special Enforcement.

The co-op should also send the sponsor a “notice to cure,” outlining in writing that this tenant is violating the law by renting the unit on a short-term basis. If the sponsor doesn’t take action against the tenant within 10 days, the co-op can likely move to cancel the sponsor’s proprietary lease, because most proprietary leases require shareholders to comply with local laws and regulations.

“The co-op has to apply the pressure to initially serve the notice to cure to start the ball rolling,” said Andrew I. Bart, a litigator who specializes in co-ops and condominiums at Kagan Lubic Lepper Finkelstein & Gold in Manhattan. “It would appear that the sponsor is violating the governing documents of the cooperative. That is a valid reason, if there is no cure, to terminate the sponsor’s shares.”

And what if the revolving door of short-term guests persists, and a notice to cure and a 30-day notice of termination of the shares are ignored? “The co-op would then proceed into housing court for its remedy, which would be eviction following the co-op’s termination of sponsor’s shares,” Mr. Bart said.

For weekly email updates on residential real estate news, sign up here.