The Least You Should Know About Hosting Your NYC Apartment

New York City is the country's biggest short-term rental market, fueled by hosting sites such as Airbnb. This makes sense considering the city has some of the highest hotel rates in the country. However, most Airbnb-type rentals are prohibited from being used as short-term rentals.

One study showed that over 50% of all units advertised on Airbnb appeared to breach both state and county laws of New York. Stiffer fines have been levied on violators in an effort to prevent such prohibited agreements.

Unhosted Short-Term Rentals in Multi-Family Structures Are Forbidden

Airbnb listings are classified as either ‘unhosted’ or ‘hosted.’ With an unhosted listing, the property is left with the short-term renter as unattended. New York State has defined the definition of multi-family structure as consisting of 3 or more households.

The state flatly restricts unhosted tenancies of less than 1 month in a unit that is part of 3 or more households living individually. Infractions of this violation can cost the legal lease holder up to $2,500 each day of the rental period. Plus, the city is not afraid of obtaining a court order. The reason for such heavy oversight is two-fold:

• By allowing tenants to “rent” their apartments online, they are side-stepping sub-tenancy requirements imposed by the building owner or state laws.
• It also prevents building owners from operating as unlicensed hotels or creating hostile renting situations, such as the strong economic impact of average rents increasing across the city.

New York City Certificate of Tenancy Requirements

All rental homesteads in New York City should have a certificate of tenancy that states the legal usage of the property. A modification of tenancy from long-term to short-term rental usage requires a change in the status of the certificate as required by law.

Property owners should submit an application to ensure it fulfills the tenancy requirements for such usage. This would consist of compliance with the New York City fire and building codes which enforce strict security requirements on units that are utilized for short-term property tenancy.

Lease Control Laws

Any potential host, who resides in a lease managed unit, should call their property manager to determine if short-term leasing is allowed. Offenses of lease control/stabilization guidelines may result in fines or even court-ordered eviction.

Zoning Laws

New York City designates the locations of where short-term rentals may be operated. Infractions of zoning laws can result in considerable fines.

Lease Restrictions

Residential landlords typically forbid tenants from subleasing their units without the property manager’s consent. Renters, who break their leases by participating in unapproved listings-- short-term or otherwise—could find themselves quickly facing eviction. Renters should carefully review their lease and speak with the property manager prior to taking part in any short-term rental income.

Pro Tip: It’s Best to Err on the Side of Caution

The idea of making extra cash for renting your home to NYC visitors. However, the cost of operating illegally could have a negative impact on one’s financial life that far outweighs the benefit. Not to mention, tenants and owners alike run the risk of court intervention as well. Discussing options for greater clarification with a licensed real estate attorney can steer the conversation towards cautious optimism.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.