The First Department, reversing Supreme Court, over a two-justice dissent, determined plaintiff was entitled to terminate defendant’s lease of a rent-stabilized cooperative apartment for “subletting” to Airbnb customers. Defendant, an elderly 40-year tenant, took in Airbnb customers on 338 days over an 18-month period, realizing $12,000 more than 10% “profit” allowed for “subletting” under the Rent Stabilization Code:
Defendant’s listing on the Airbnb website also provided (1) links for making reservations, (2) “check-in” and “check-out” times, (3) the financial penalty for untimely cancellation, and (4) reviews from numerous past guests.
Turning her rent-stabilized apartment into a single-unit tourist hotel in this fashion enabled defendant to earn substantial profits, far in excess of the legally permissible 10% premium. After Airbnb (to which the subtenants paid the rent) deducted its fees, the subletting generated total income of $33,592.00 for defendant. The stabilized rent she paid for the same 338 days (based on the aforementioned per-diem figure of $57.80) was only $19,536.40. Thus, defendant realized a 72% profit from her subletting — about seven times the 10% premium permitted for otherwise lawful sublets of furnished rent-stabilized apartments. Had defendant limited herself to the 10% premium permitted by the RSC, her aggregate revenue would have been $21,490.04 — about $12,000 less than her actual revenue of $33,592.00. Taking into account the lawful 10% premium (and ignoring the fact that the apartment was shared), defendant overcharged her 93 subtenants, in aggregate, by approximately 56% … . Goldstein v Lipetz, 2017 NY Slip Op 04070, 1st Dept 5-23-17
LANDLORD-TENANT (TAKING IN AIRBNB CUSTOMERS IN A RENT-STABILIZED APARTMENT VIOLATED THE RENT STABILIZATION CODE (NYC), LESSOR ENTITLED TO TERMINATE THE ELDERLY 40-YEAR TENANT’S LEASE)/RENT STABILIZATION CODE (NYC) (TAKING IN AIRBNB CUSTOMERS IN A RENT-STABILIZED APARTMENT VIOLATED THE RENT STABILIZATION CODE (NYC), LESSOR ENTITLED TO TERMINATE THE ELDERLY 40-YEAR TENANT’S LEASE)/AIRBNB (TAKING IN AIRBNB CUSTOMERS IN A RENT-STABILIZED APARTMENT VIOLATED THE RENT STABILIZATION CODE (NYC), LESSOR ENTITLED TO TERMINATE THE ELDERLY 40-YEAR TENANT’S LEASE)