A recent law that concerns the New York City housing market is Chapter 225 of the Laws of 2010, otherwise known as New York’s “Illegal Hotel Law” or “Vacation Rental Ban Law.” The law, which came into effect in May of 2011, bans certain short term apartment rentals.
Unfortunately, the law was followed by a wave of confusion. Much of the confusion centers on the fear that the new legislation seeks to disrupt, or even forbid, the real estate “sharing economy.” Because New York Habitat is aware of the importance of alleviating this confusion, we are pleased to announce that New York State Senator Liz Krueger has issued a press release on her website on Friday, December 13th 2013 entitled “Answers for New Yorkers Concerned or Confused about the Illegal Hotel Law”. Senator Krueger addresses the misconceptions of the law and makes it clear that the fear of a threat to the sharing economy (the ability to rent to a roommate) has no grounds in either the intention or the content of the law.
New York Habitat would like to address Senator Krueger’s points regarding the sharing economy and inform you of what New York Habitat is doing to ensure that the listings we offer to our clients are in compliance with the law. In addition, we would like to provide some general tips for individuals who choose to rent apartments on their own or with other agencies. Of course, these steps will not be necessary when renting through nyhabitat.com, because all of the research to ensure compliance of our own listings is done internally.
In addition, we encourage you to check out the article on Senator Krueger’s press release, which can be accessed in its entirety from the New York State Senate website.
- Senator Krueger clarified in her press release that a rental violates the “Vacation Rental Ban Law” when:
a) the rental is in a permanent residential apartment building;
b) the building has three or more units; AND
c) the residential unit is being rented for less than 30 days.
What New York Habitat Does: To ensure that all of New York Habitat’s listings are in compliance with the law, we have created separate departments for rentals of less than 30 days and rentals of 30 days or more. Before listing any property, we determine, by a search of the public record, how many units the building has and whether the building contains permanent residential apartment units. If the building has three or more residential apartment units, it is only offered to our clients for stays of 30 days or more.
What You Can Do: Ask the host if the unit that you wish to rent is in a residential apartment building with three or more units. If the host says that the building is residential and has three or more units, it is not a good idea to rent this apartment for less than 30 days. If the host says that the building is a one- or two-family house, the “Vacation Rental Ban Law” does not apply to the rental.
- Senator Krueger further addressed the widespread concern that the law prevents individuals from having roommates. She explains that the “Vacation Rental Ban Law” does not place any restrictions on sharing, as long as the rental is the host’s primary residence.
What You Can Do: When renting, always be sure to clarify with the host whether the host will be present in the apartment during your stay. If the host will be present, and the apartment is the host’s primary residence, you need not worry about violating the “Vacation Rental Ban Law.”
- Senator Krueger further addressed the fact that rental leases and coop and condo bylaws usually prevent tenants from renting out their apartments anyway without permission from their landlord, coop board, or condo board. In a rental lease or coop bylaws, these restrictions apply only to subletting an entire apartment. Sharing an apartment with a roommate does not require permission when the host is a rental tenant or a coop shareholder. However, there may be restrictions on sharing in condo bylaws.
What New York Habitat Does: New York Habitat reviews the condo bylaws of all condo owners who would like to list with us. We determine from these documents what, if any, restrictions there are on sharing and ensure that these restrictions are complied with.
What You Can Do: Ask the host if they own the building or house or if they are a rental tenant, coop shareholder tenant, or condo owner. If the host is a condo owner, ask them if their bylaws allow them to have a roommate. Get this information from the host in writing.
- Senator Krueger also focuses specifically on rent stabilized tenants and the penalties they have faced for renting out their apartments for a price that is not proportionate to their rent.
What New York Habitat Does: When working with a rent stabilized tenant, New York Habitat will not list the room for a price that is not a proportionate amount of the total rent.
What You Can Do: Ask the host of the apartment you would like to share if the host is a rent stabilized/rent controlled tenant, or a free market tenant. If the host is a rent stabilized or rent controlled tenant, ask the host for confirmation in writing that the rent you will be charged is a proportionate amount of the total rent that the tenant pays.
New York Habitat applauds Senator Krueger’s efforts to clarify the laws regarding short term vacation rentals in New York City. Hopefully this explanation of how Senator Krueger’s points are addressed in New York Habitat’s policies has been helpful to mitigate some of the concerns that arise from the confusion surrounding the law’s effect (or lack thereof) on the sharing economy.