The New York City Mayor’s Office of Special Enforcement filed a lawsuit Monday against a Manhattan-based brokerage and property management firm, accusing it of converting units of at least five properties it manages or owns into illegal short-term rentals, including an entire building in East Harlem.
“Illegal hotels take precious housing away from New Yorkers and destabilize our communities,” Mayor Bill de Blasio said in a statement. “My administration is cracking down on corporate operators to ensure residents and visitors are safe and are treated fairly.”
Metropolitan Property Group is accused of illegally advertising short-term rentals on Airbnb through approximately 250 listings via about 101 hosts accounts, according to the complaint.
The listings were located in five buildings it owned or managed in Kip’s Bay and East Harlem, as well as at least 30 other properties. The units could have been used as permanent residences, according to the complaint.
“Presumably through the relationships [Metropolitan Property Group] and its real estate agents have allegedly cultivated, they have controlled, managed, operated, offered and advertised illegal short-term rentals within the Subject Buildings as well as at least 30 other permanent residential buildings in Manhattan since at least 2014 with an estimate of at least 130 different apartments converted from permanent residences to transient accommodations,” the complaint reads.
The complaint further says that Metropolitan Property Group and five of its brokers — all named as co-defendants in the suit — utilized identical information and inaccurate addresses to set up distinct host accounts and listings, which is clear circumvention of Airbnb’s restrictions.
The listings contained false or incomplete information, “all but guaranteed to cause confusion for any consumers utilizing the Airbnb service,” according to the complaint.
“From 2015 to 2018 alone, [Metropolitan Property Group] conducted over 13,600 illegal short-term rental reservations spanning 55,000 nights, deceiving almost 76,000 guests through their unlawful advertisements on Airbnb,” the complaint says.
“The ill-gotten gains from just under 3,000 of these illegal short-term rental transactions, totaling almost $4.2 million, were made payable directly to [Metropolitan Property Group’s] Fifth Avenue office. This astonishing amount of illegal short-term rental transactions and revenue generated seems to place [Metropolitan Property Group] among ‘the top 10 percent of hosts earned a staggering 48 percent of all revenue.’”
The New York City Mayor’s Office of Special Enforcement is seeking a judgment of $500 for each knowing violation and $350 for each unknowing violation.
“This case is a clear example of just one thing: the ongoing need for a comprehensive, statewide bill that would provide for strict recourse against the few bad actors while protecting the rights of thousands of regular New Yorkers who are responsibly sharing their home,” said Josh Meltzer, head of northeast policy for Airbnb, in a statement.
“Airbnb supports legislation in Albany that would do just that, and we invite the Office of Special Enforcement to come to the table and work with us on a real path forward.”
The New York City Council has been aggressive in its attempts to regulate the short-term rental industry in New York City. A new law was passed over the summer and will go into effect next month that requires the names and addresses of hosts, the type and frequency of rentals and rental income to the Mayor’s Office of Special Enforcement.
Metropolitan Property Group is a Manhattan-based brokerage with rental and commercial operations. It was founded in 1998 and currently has more than 200 agents in three offices.
Inman was forwarded to Metropolitan Property Group’s lawyer Douglas Pick for comment. Pick was in court and did not immediately return a request for comment.
