Rosenberg & Estis, P.C. defeats Airbnb Motion to dismiss Short-Term Rental Lawsuit

by | Oct 16, 2024 | Press Releases

Rosenberg & Estis, P.C., currently celebrating its 50th year as one of New York City’s pre-eminent real estate law firms, has successfully defeated a motion filed by Airbnb seeking to dismiss a lawsuit against it alleging that Airbnb illegally enabled a tenant to rent her apartment in violation of New York City’s Local Law 18.

The decision by the Hon. Suzanne Adams in the Supreme Court of the State of New York paves the way for landlord Columbus 69th LLC to seek damages against Airbnb for permitting the landlord’s tenant, Carmen Magarin de Dominguez, to illegally advertise and sublet her apartment using Airbnb’s platform.

“This is a precedent-setting decision that cements the validity and intent of Local Law 18, which Airbnb cannot evade, despite its stringent efforts,” said Michael A. Pensabene, a Member of Rosenberg & Estis’ Litigation Department, who represented the landlord.

Last year, Airbnb lost an appeal in the State Supreme Court challenging the legality of Local Law 18, which was enacted in January 2023 to curb short-term rentals in multi-family buildings, including rent controlled and stabilized apartments, Mitchell Lama properties and any property receiving a federally subsidized mortgage. The law also allows any property owner – of any property type – to prohibit short-term rentals in their buildings by registering them on a “prohibited list” so that Airbnb and any other similar platform is on notice that they are not permitted to list apartments in these buildings on their platforms.

Columbus 69th LLC originally filed suit arguing that Airbnb failed to verify de Dominguez’ short-term rental registration number, as required by Local Law 18, when she offered her three-bedroom unit at 207 Columbus Ave. for short-term lease on its platform.

At that time, the court granted a Temporary Restraining Order prohibiting the use and the advertisement of the host’s apartment on Airbnb until further argument could be heard.

In the interim, Airbnb filed its motion to dismiss the lawsuit, arguing that Local Law 18 was a legislative effort with public goals that prohibited a private right of action.

However, in denying Airbnb’s motion to dismiss the lawsuit, Judge Adams agreed with Pensabene’s argument that the action “complements” the law “by seeking other relief that is not part of the City’s enforcement mechanisms, yet at the same time “promotes the legislative purpose” of the law and is consistent with the legislative scheme.”

Said Pensabene, “We are pleased that the court agreed that our private action fits within the purpose of Local Law 18, which is to address illegal short-term rentals in New York City. Airbnb has played fast and loose with the rules for too long and this decision shows that the court will not stand for it.”