Scott Smiler, Partner, Gallet, Dreyer & Berkey
New rules, same office. As part of Local Law 18, the mayor created or added to the powers of an Office of Special Enforcement (OSE), including facilitating this prohibited buildings list. If a board or a managing agent would like to add their building to the prohibited building list, there's now a portal and an application that you have to fill out. It allows building owners to have a complete ban on all short-term rentals within their building. Where most co-op boards and maybe some condo boards were a little bit more laissez-faire when it comes to short-term rentals and subletting, you now have the ability to get on that list.
The real crux turns though, upon what is in the governing documents for the building, meaning there has to be some prohibition in the governing documents. In order to be considered to be added to the prohibited building list, you would have to submit to the OSE some type of provision in the governing documents that says, "This building as a policy, as a practice, as a rule, prohibits these types of short-term rentals."
Back up your words. Most buildings didn't even contemplate short-term rentals during conversion, so their governing documents probably only touched upon this in the general sense of a guest policy. We're recommending to our boards that they at least pass a house rule specifically and expressly prohibiting short-term rentals. It's a stopgap.
Once that first stage is done, though, we do recommend perhaps at your next annual meeting or at your next special meeting that you do propose an amendment to the prop lease or to the bylaws. It’s a more authoritative step.
Boards have to get an understanding of their demographic and where their politics lie. Anytime you push any type of house rule, no matter how mundane or severe it may be, there's always that balancing act. You want people to buy into your building as their own home. This prohibition lines up with that track. You're never going to please everybody. That's the nature of the beast. But I do think that there's going to be a lot more people on the side of prohibiting short-term rentals than not.