The city has reached a $1 million settlement with two property owners it sued for operating an illegal hotel listed on sites like Airbnb, the Daily News has learned.
“Landlords who turn homes into illegal hotel rooms face high costs — in this case $1 million in penalties. This City will aggressively enforce the law to protect our housing stock and the safety of New Yorkers,” Christian Klossner, head of the Mayor’s Office of Special Enforcement, said.
But the landlords, Majid and Hamid Kermanshah, will actually only have to fork over $201,500 in cash. The city will credit another $798,500 in rent they couldn’t collect during the proceedings toward the $1 million amount.
The $201,500 will be paid in monthly installments of $6,500, according to the settlement.
The settlement also permanently bars the duo from operating or advertising such illegal hotels in the city. It is against the law in New York to rent out an entire apartment for fewer than 30 days, or even advertise doing so. That has put sites like Airbnb, built on people renting out their own homes, in a bind.
The Kermanshahs, who are brothers, were listing units in two residential buildings, 59 Fifth Ave. and 5 W. 31st St., for nightly bookings on websites including Airbnb. The addresses were marketed under the names “Contemporary Design Suites” and “Urban Oasis Hostel.”
“My guys are small landlords and I don’t think they appreciated, or understood really, the consequences,” their lawyer Thomas Harvey told the Daily News.
The brothers declined to comment, through their attorney.
The city has made a point after going after such operations in recent years — blitzing many with tickets for violating building safety codes and rules against transient rentals. In some cases, the city has been referred cases by a group funded by the Hotel and Motel Trades Council, a hotel workers’ union.
Though it’s not clear if everyone with an Airbnb listing is treated the same way. Mayor de Blasio donor Jona Rechnitz had reached out to Hizzoner for help with fines he’d racked up in 2014. While he did pay more than $75,000 in fines, a Daily News review found that after that payment was made, the complaints about illegal hotel activity at his building continued for nearly a year beginning in February 2015 — but no more sanctions were issued.
Josh Meltzer, northeast head of public policy for Airbnb, said, “We strongly oppose illegal hotels and continue to work to identify and remove listings that do not reflect our vision for our community and our one host, one home policy.
“Airbnb supports legislation in Albany that would distinguish between illegal hotel operators who remove permanent housing from the market and the vast majority of New Yorkers who occasionally rent out their home to make ends meet.”