Airbnb Illegal In New York City, Judge Rules

05/21/2013 02:48 pm ET | Updated May 21, 2013
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Airbnb is illegal in New York City, an administrative judge has ruled, but that doesn't necessarily mean the thousands of New Yorkers using the site will be punished.

The judge determined that Airbnb violates New York's illegal hotel law, CNET reports, which bans New Yorkers from renting apartments for less than 29 days. The 2010 law was meant to curb landlords from turning their buildings into unlicensed inns.

The judge's decision was part of a case against Nigel Warren, who rented his East Village pad to a Russian woman for three nights at a cost of $300. Officers from the Environmental Control Board showed up to the building and slammed Warren's landlord with violations potentially totaling $30,000 in fines.

As Business Insider notes, the illegal hotel law "is only actionable as a secondary offense. For example, if the police show up after a noise complaint and then find you renting out your place, only then are you in extra trouble." This was apparently how Warren was busted.

Airbnb provided Warren a lawyer in the case, the first time the popular startup has felt the need to step in and defend itself during a court hearing. As The Verge reports, the illegal hotel law includes the exemption that hosts can rent out space to "lawful boarders" so long as the host is also there. Warren's lawyer argued that because the defendant's roommate was home during the Russian woman's stay, the exemption applied.

Judge Clive Morrick thought otherwise, according to The Verge, ruling that the terms "boarders and lodgers" in the law means "occupants who share the life of the dwelling with its permanent occupants" and not to "complete strangers who have no, and are not intended to have any, relationship with the permanent occupant."

Neither Warren or his roommate ever chatted with their Russian guest, and therefore, Morrick ruled, the exemption did not apply. Morrick fined Warren's landlord-- effectively fining Warren-- $2,400.

Airbnb has long argued that the illegal hotel law wasn't intended to target services like theirs. After Morrick's ruling, they sent HuffPost the following statement:

This decision runs contrary to the stated intention and the plain text of New York law, so obviously we are disappointed and we are considering all appeal options as we move forward. Put simply, this decision is wrong on the law, and bad for New York. The laws in New York and around the world are confusing and often contradictory, but we intervened in this case because this was the one area of the law that seemed most clear. This decision demonstrates how difficult is for hosts and even companies like ours to adequately understand laws that were not meant to apply to regular people hosting to make ends meet.

And more importantly, this decision makes it even more critical that New York law be clarified to make sure regular New Yorkers can occasionally rent out their own homes. There is universal agreement that occasional hosts like Nigel Warren were not the target of the 2010 law, but that agreement provides little comfort to the handful of people, like Nigel, who find themselves targeted by overzealous enforcement officials. It is time to fix this law and protect hosts who occasionally rent out their own homes. 87 percent of Airbnb hosts in New York list just a home they live in -- they are average New Yorkers trying to make ends meet, not illegal hotels that should be subject to the 2010 law.

The illegal hotel law was passed after strong support from the powerful Hotel Association of New York City which, for obvious reasons, would prefer you not sign up for an Airbnb account.

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