An Introduction to New York's Short Term Rental Laws

The world of short term rentals is a weird, tricky thing—especially in a city as big as New York. There are dozens of websites that allow people to freely list their homes/apartments/condos, plusadditional sites that help people make the best listing possible. Thesesites have mostly operated in their own realm, but in recent months, we've seen many of them get direct support from the city in order to help house people who were displaced by Hurricane Sandy. It's obvious that short term renting is a growing industry that shows no signs of slowing down, but the fact of the matter is that most of these rentals are illegal.

What the Law Says Contrary to what many may think, New York laws about short term rentals are pretty clear, thanks to a new law went into affect in 2011. "Under the New York State multiple dwelling law, a residential multiple dwelling can only be used for what is termed 'permanent resident purposes,'" explains attorney Robert Braverman. "What that means under the statute is that it has to be occupied by the same person or family for 30 or more consecutive days." So anything less than 30 days, no matter how you swing it, is violating the law, unless of course, the place is zoned to be a hotel or hostel.

Are There Exceptions for Family Members? "If I own an apartment, my immediate family can come in and occupy it as my guest," says Braverman, "but I can't rent it out to anyone for less than that 30 days." This, evidently, is "one of the big loopholes." The Class A multiple Dwelling lawdefines "family" as such:

A "family" is either a person occupying a dwelling and maintaining a household, with not more than four boarders, roomers or lodgers, or two or more persons occupying a dwelling, living together and maintaining a common household, with not more than four boarders, roomers or lodgers.So while the law restricts the occupancy of units to family members, the definition of "family" is quite broad. "People who are engaging in the business of short term rentals," says Braverman, "will very often try to avoid detection by a managing agent, doorman, or concierge by saying 'Oh my friend is coming and she's going to be staying for a couple weeks,' I'm leaving her a key."

There's One Other Exception, Too It's not illegal to rent a room if you are occupying your apartment at the same timeand all parts of the apartment are available to the paying guest. However, while the multiple dwelling law may not prohibit this, individual leases or condo/co-op bylaws very well may prohibit it, so anyone interested in doing this should check with their landlord or building board first.

What To Do If You Suspect An Illegal Short Term Rental There are two ways that illegally operating short term rentals can be caught: through private lawyers and by the city. The first option is more likely to happen in larger condo or co-op buildings that have legal representation. The board or management will go to their lawyer, like Braverman, who will investigate the case. Braverman says they first thing they do is search on sites like Airbnb and Craigslist to see if the unit is being advertised. If they find something, they contact the person and ask that they stop. This is when most people "realize the jig is up," and they drop it. If they don't stop, the condo board can take them to court and seek an injunction.

The second way illegal rentals are discovered is through complaints being called into 311 (you can also submit complaints online). When an illegal hotel (that's the key phrase to use) is reported, a city task force investigates, and this can result in some hefty fines. First offenders can be fined anywhere from $1,000 to $5,000, and they go up exponentially from there—one man currently faces up to $30,000.

Will These Laws Ever Change? Short term rentals, and the websites that offer them, are not going to disappear, and companies in the business are trying to change the regulations. After all, it must be stressful knowing that the majority of your patrons are living outside the law. Last month, AirBnB, HomeAway, TripAdvisor, and FlipKey formed the Short Term Rental Advocacy Center with the goal of amending "restrictive short-term rental regulations at the local level." They believe that "existing 'good neighbor' laws provide sufficient protection against any disruptive behavior on the part of long-term residents or their guests." In New York, the group is "working with local residents and short-term rental providers to share information, establish best practices, and advance smart short-term rental regulation that benefits all stakeholders." Any real change is years away, but there's a chance we could see a future where renting your apartment for $1,500 a week won't land you in court, facing $15,000 in fines.