In an effort to protect New York City’s critical housing supply, the Office of Special Enforcement (OSE) filed its first lawsuit using Local Law 18 (LL18), alleging unregistered short-term rentals and violations of the city’s longstanding short-term rental laws by the owners and managers of 10 apartments in Manhattan’s West Village. The action signals a clear message that profiting from unregistered and unlawful short-term housing operations will not be tolerated, and the city is putting New Yorkers first by reclaiming housing units for local residents.
The lawsuit details how the owners, operating as Incentra Village House, continue to violate numerous city laws and systematically deceive customers with misleading listings, while simultaneously misrepresenting their lawful status to online booking websites to evade the registration law’s prohibitions. Customers complained online about the poor physical condition of the rooms, deceptive listings, and safety hazards, which City inspectors confirmed during a recent inspection.
Despite explanations from three different city agencies that the properties could not lawfully be operated as short-term rentals and repeated opportunities to come into compliance, the Incentra Village House refused to stop their illegal and unsafe short-term rental operations. Their persistent defiance, even after legal appeals failed, prompted the city’s action to preserve and return 10 units of much-needed housing to the city’s residents.
“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,” said New York City Mayor Eric Adams. “This lawsuit demonstrates the city will flex the muscle of Local Law 18 to protect local renters and hold bad actors accountable.”
Local Law 18 is a powerful tool in New York City’s arsenal in combatting illegal short-term rentals and bringing unlawful property owners and hosts into compliance.
“This illegal operation was brought to light thanks to New York City’s robust registration and verification requirements,” said Christian Klossner, Executive Director of the Office of Special Enforcement. “Local Law 18 was designed to give short-term rental hosts a chance to understand and comply with longstanding city laws and gave the city new tools to address those operations that seek to illegally profit off our housing stock.”
While the city continues to issue summonses for violations of longstanding short-term rental laws, LL18 created new financial penalties that ensure unregistered short-term rental operations are not financially viable by imposing penalties of three times the illegal revenue collected.
Industry-leading rental platforms are complying with LL18, eradicating tens of thousands of illegal online short-term rental listings since 2023 and paving the way for property owners and managers to return the units to the housing market.
In addition, nearly 14,000 buildings in the city have taken advantage of the law to place their properties on the city’s prohibited list, enhancing the quality of life for their residents and preventing tenants from putting themselves in harm’s way by running afoul of building rules. Furthermore, tourist safety is enhanced by a system that curtails deceptive listings which often leave visitors in unsafe or unsanitary conditions.
About Local Law 18
New York City passed Local Law 18, also known as the Short-Term Rental Registration law, in 2022. The city opened its registration application process in March 2023, and began enforcing the law’s verification requirements in September 2023. The law requires short-term rental hosts to register with the Office of Special Enforcement (OSE), limits registration to a natural person that is the permanent occupant of a housing unit, and prohibits OSE from granting a registration for certain types of units, such as rent-regulated and NYCHA units. The law also requires OSE to deny registration requests for buildings on a prohibited buildings list, comprised of buildings whose owners notify OSE that short-term rentals are not allowed in their buildings. More than 3,000 registrations have been granted and more than 14,000 property owners and managers have placed their buildings on the prohibited list.
About the Mayor’s Office of Special Enforcement
The Mayor’s Office of Special Enforcement, positioned within the Mayor’s Office of Criminal Justice (MOCJ), is an innovative, solutions-oriented task force that ensures communities are safe from harmful, illegal, and unregulated industries that one agency and one set of enforcement tools alone can’t address. OSE’s multi-agency enforcement team devises strategic solutions to complex problems and is responsible for both the enforcement of laws and regulations on short-term residential rentals and the education of the public on these laws. For more information, visit nyc.gov/ose.
Featured image credit: DepositPhotos.com
