What Do You Need to Know About Airbnb?

July 6, 2018

 

 

To Airbnb, or not to Airbnb, that is the question.  Before you put your home on Airbnb or buy a property with the intention of listing it for short-term rental, be sure to do your homework and consider speaking to an attorney. As a starting point, here’s a brief overview of some of the regulations and rules that come into play.

 

Do you rent?

 

If you are a renter, chances are your lease prohibits subletting or renting without permission from the landlord. Some landlords go even further and will explicitly prohibit tenants from doing short-term rentals and will monitor the Airbnb site to see if tenants are advertising on it. For those in rent-stabilized or rent-controlled apartments, the New York City Rent Stabilization Code prohibits tenants from making a profit by subletting their below-market-rate apartments, and illegal hosts can face hefty fines and eviction.

 

Do you own a coop or condo?

 

Even if the building does not explicitly prohibit Airbnb, it may be covered under the building’s bylaws, proprietary lease, or house rules (e.g. many buildings include a house rule against guests entering or staying in an apartment in the absence of the owner or tenant shareholder). Violating these rules could mean fines or even eviction.

 

Are you subject to New York’s Multiple Dwelling Law?

 

New York’s Multiple Dwelling Law applies to any building that houses 3 or more families, even if the host owns the entire building. This law makes it illegal to rent any private apartment for fewer than 30 days unless the host is present for the entire duration of the rental. Crackdowns on violations have increased, and merely advertising an illegal rental can lead to fines of $1,000 or more per listing.

 

Is your house up to snuff?

 

Would-be hosts must ensure that  their homes comply with certain building codes, such as occupancy levels.  Meeting these standards could be pricey.

 

Are you subject to the hotel occupancy tax?

 

In addition to standard income taxes, etc., you may be subject to New York’s Hotel Room Occupancy Tax. The computation and applicability of this is complex, and as with all tax-related matters, you should consult your accountant or tax professional.

 

Airbnb can provide visitors with inexpensive short-term lodging and hosts with a healthy income stream; but on the flip side, a revolving door of strangers can be a nightmare for neighbors. With this push and pull, the future of Airbnb in New York is a bit up in the air as the city council is currently considering a bill, largely advanced by the hotel industry, that would further crack down on short-term rentals in the city.

 

One of the real estate attorneys we work with frequently also wrote an article on this topic, and includes even more details. Check it out here

 

 

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The Isil Yildiz Team

 

Compass 

110 5th Avenue

New York, NY 10011

(P) 985-714-4470

isil@compass.com

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Compass is a licensed real estate broker and abides by Equal Housing Opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdraw without notice. No statement is made as to accuracy of any description. All measurements and square footages are approximate. Exact dimensions can be obtained by retaining the services of an architect or engineer. This is not intended to solicit property already listed.