Local Law 18: A Dramatic Change
to Short-Term Rentals in New York City
On January
9, 2022, the New York City Council passed the Short-Term Rental
Registration Law (“Local Law 18”), which contains sweeping changes
directly impacting the ability of a unit owner to rent out his or her
apartment on short-term rental websites, such as Airbnb, VRBO,
Booking.com and others that collect a fee for short-term rental
listings. The law took effect on September 5, 2023.
This law now requires all short-term rental hosts to register with the
Mayor’s Office of Special Enforcement (“OSE”), which oversees the
enforcement of Local Law 18. Although not a de-facto ban on all
short-term rentals in NYC, Local Law 18 imposes significant and
burdensome requirements on short-term rental hosts, which will likely
severely impact these hosts’ ability to rent out their apartments on a
short-term basis. For example, under this new law, a host must reside
as a permanent occupant in the dwelling unit used for short-term
rentals and must maintain a common household with the short-term
tenant. In other words, a host must occupy the apartment with the
short-term tenant and the short-term tenant must have access to all
parts of the dwelling unit. A registered host is therefore prohibited
from renting out the entirety of the registered dwelling unit, a
significant departure from the business model of short-term rental
companies, which permits unit owners to rent out the entire dwelling
unit to a short-term tenant. Any violation of Local Law 18 will result
in serious and escalating fines issued to the registered host. Under
the law, a short-term tenant will not be fined.
Under the new law, short-term booking services (such as Airbnb, VRBO
and booking.com) are prohibited from processing any transactions for
unregistered short-term rentals. Local Law 18 also requires OSE to
maintain a prohibited buildings list (“PBL”), which includes buildings
where short-term rentals are prohibited by law (i.e. New York City
Housing Authority buildings) or by application of the owner of the
building. Short-term listings for units in “Class B” multiple
dwellings, which have been approved by New York City for legal
short-term occupancies, are exempt from the registration requirement,
as are rentals for 30 consecutive days or more.
Under the OSE guidelines, Local Law 18 also defines owners as a board
of a cooperative or condominium corporation, manager or agent of a
building. Therefore, the board, agent or manager of a condominium or
cooperative may notify OSE that short-term rentals are prohibited in
their buildings, as a result, for example, of the terms of the
proprietary lease or by-laws, and request that the building be placed
on the PBL.
In order for an owner to ensure that their building is placed on the
PBL, the applicant must certify that leases and other occupancy
agreements for dwelling units within the entire building prohibit
short-term rentals and will need to provide the following information:
(i) the name of the person making the application; (ii) a working phone
number for the applicant; (iii) an email address for the applicant;
(iv) the address of the building the applicant seeks to add to the
list; (v) an explanation of the relationship between the owner
and the applicant; and (vi) any proof or documentation requested by OSE
to substantiate the request where OSE has cause to require further
verification.
As Local Law 18 has only recently come into effect, OSE has been
delayed in processing the vast number of applications that have been
received. As a result, OSE has sought further proof and documentation
on a significant number of applications. To ensure that the application
process is streamlined, we strongly recommend to our clients that they
consult with one of the leading attorneys in this field at SSRGA.
If you have any questions, please feel free to contact your trusted
SSRGA attorney.
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