In a 52-page decision, District Judge Paul A. Engelmayer of the Southern District of New York put a kibosh on New York City’s short-term rental regulation that was set to go into effect on February 2, 2019.  NYC has been trying to figure out an efficient way to enforce its short-term rental restrictions and this regulation was a way that it was hoping to do so.  

Under the regulation, Airbnb, Homeaway and other short-term rental platforms would have had to provide transparent monthly reporting to NYC which it was going to use to help its enforcement efforts by identifying wrongdoers.  The Court preliminarily enjoined NYC with regard to the regulation which essentially amounts to a win for the short term rental platforms.

This however will not stop NYC from continuing to investigate and issue violations to buildings with illegal short term renting.  NYC’s Mayor’s Office of Special Enforcement has been cracking down on illegal short term renting, issuing violations with significant monetary penalties, to offenders and building owners including condominiums and cooperatives.  

Now that NYC’s latest effort to enforce the law has been stymied by Airbnb’s and Homeaway’s Federal Court injunction, buildings need to be more vigilant and proactive in protecting their own buildings from short term rental violations which violate NY law as well as their own rental restrictions which may be more conservative than NY law.  NYC will continue to investigate and issue violations where appropriate and buildings will have to defend themselves and seek mitigation of the violations that are being issued.  The only way to do that is to be vigilant and proactive.  Buildings that sit idle expecting NYC to do the leg work may find themselves on the wrong side of a violation.

Buildings and jurisdictions like NYC have to keep expanding awareness of rental restrictions and harnessing as much data as possible to identify wrongdoers and deter illegal renting.  Once wrongdoers are identified, jurisdictions can still issue subpoenas to Airbnb and the other booking agencies in their enforcement efforts. We expect NYC to keep up its enforcement efforts and it and other jurisdictions in the same boat need buildings to do their proactive part. That seems to be the message sent by the Federal Court in its decision (read it here).