First Landlord Lawsuits Lobbed Against Airbnb, Tenants In New Legal Landscape

Landlords have begun going after tenants and Airbnb following the start of enforcement of New York City’s short-term rental laws, and one suit has already seen a significant ruling in favor of a property owner.

Canvas Property Group last month sued Airbnb and a tenant in its Upper West Side multifamily property at 207 Columbus Ave. after listings for a unit in the building remained online. New York Supreme Court Judge Suzanne Adams issued a temporary restraining order against the short-term rental company and the tenant, barring them from listing the unit.

The ruling was hailed as "a precedent-setting victory" in a press release from law firm Rosenberg & Estis, which represented the landlord. It is the first lawsuit lodged by a landlord after NYC’s new short-term rental law, Local Law 18, went into effect in early September.

“This is a clear signal to Airbnb and its hosts in New York City that they cannot ignore the law,” said Michael Pensabene, the Rosenberg & Estis litigator who is representing the building owner. “The court’s granting of an immediate temporary restraining order demonstrates that Airbnb and the tenant must comply with Local Law 18.”

Airbnb sued the city in an attempt to reverse the legislation, but its complaints were ultimately rejected. The law places the onus on renters who illegally use units as Airbnb locations rather than on landlords whose multifamily properties are used by tenants as short-term rentals.

Under Local Law 18, hosts who illegally rent out their apartments could be subject to fines as high as $5K, while Airbnb and other short-term rental platforms like Vrbo could face fines of $1,500 per listing. But that hasn’t deterred some from trying.

Canvas had already put its property forward for inclusion on the city’s prohibited buildings list, which allows landlords to register properties where short-term rental use violates the residential leases, it claimed in the suit.

But the tenant continued to utilize the property as a short-term rental listed on Airbnb, according to the lawsuit. Canvas sued Airbnb as well, claiming it continues to show listings for buildings on the do-not-register list.

The safety of other residents is endangered by Airbnb continuing to allow tenants to operate illegal Airbnb listings, lawyers for Canvas Property Group argued in the complaint.

“There’s no real incentive [to comply with the law] other than these litigations,” Canvas Property Group founder Robert Morgenstern told The Real Deal.

Airbnb didn't immediately respond to Bisnow's request for comment.

A second suit, filed in early October by S&P Associates of New York against Airbnb and a tenant at 30 West 63rd St., uses the same argument.

“Tenants are unlawfully renting the premises, or a portion thereof, to unauthorized short-term occupant via Airbnb in violation of the lease and applicable law,” Rosenberg & Estis attorneys wrote on behalf of the plaintiff.

The suit includes a date-stamped listing of the unit from Oct. 4 on Airbnb among its evidence.

Airbnb must shoulder some of the responsibility and help landlords prevent tenants from running illegal short-term rentals, Rosenberg & Estis member attorney Michael Pensabene, who is representing Canvas, told TRD. 

“The way these laws are written, it puts the burden on the landlords to enforce the law,” he said. “Airbnb continues to flout Local Law 18 … and in my experience, these hosts look to get away with as much as they can.”