City Files First Lawsuit Under Law Barring Illegal Short-Term Rentals

Co-op and condo boards applauded when the city enacted Local Law 18, which was designed to cut down on the scourge of illegal short-term apartment rentals in their buildings. 

“I love Local Law 18!” Stuart Saft, a partner at the law firm Holland & Knight and then-chairman of the Council of New York Cooperatives & Condominiums, told Habitat shortly before the law went into effect in January 2023. “Building owners, including co-op and condo boards, can now register with the city to forbid short-term housing.”

Now, more than two years later, the city has filed its first lawsuit under Local Law 18, alleging that 12 apartments in a pair of West Village townhouses are being used as illegal short-term rentals, Brick Underground reports. According to the lawsuit, the defendant, Incentra Village House, advertised short-term stays on the websites Airbnb, Booking.com, Expedia Group/VRBO, and TripAdvisor-affiliated sites as well as its own website.

Local Law 18, also known as the Short-Term Rental Registration Law, requires owners and renters to register their short-term rentals with the Mayor’s Office of Special Enforcement (OSE), a tool for enforcing the city’s existing rules for short-term rentals. It’s illegal for New Yorkers who live in buildings with three or more residential units to rent their apartments out for fewer than 30 days unless the owner or leaseholder is present during the stay.

Hosts who successfully register their short-term rentals receive a registration number to display in online listings. Posting listings for unregistered short-term rentals violates the law. Both hosts and listing sites that break the rules can be penalized — up to $5,000 for hosts and $1,500 for listing platforms.

Since Local Law 18 went into effect, tens of thousands of illegal online short-term rental listings have been eliminated, and nearly 14,000 buildings in the city have requested to be included on the city's prohibited building list, which bans all short-term rentals in the designated building, according to a statement from OSE.

"With a vacancy rate of a mere 1.4%, New York City cannot afford to have housing units siphoned off for illegal short-term rentals," Mayor Eric Adams said in a statement. "This lawsuit demonstrates the city will flex the muscle of Local Law 18 to protect local renters and hold bad actors accountable.”