Condo Board Members Busted for Illegal Rentals

A team of New York City law-enforcement officers swarmed the Atelier, a 46-story luxury condo tower in Midtown Manhattan, issuing 27 notices of violations for illegal hotel use, the Wall Street Journal reports. It was one of the largest crackdowns on short-term rentals and could be a sign of what’s to come. 

Most New York City co-op and condo boards – like their counterparts nationwide – have been struggling to limit short-term rentals that can run afoul of local laws designed to limit hotel-style stays in residential buildings. In a twist, two members of the Atelier condo board were among those cited for making illegal short-term rentals – and putting up illegal partitions in their units to create extra rooms. A group of unit-owners at the condominium blame the condo board for the problem, and they’re seeking to oust it. The president of the board, Daniel Neiditch, says the board has taken action against hosts who rent illegally.

The violations at the Atelier went to 20 different unit-owners who allegedly rented to guests from at least 15 countries, including Argentina and Spain. Some guests paid $400 a night, and one group of six from Switzerland paid a total bill of $3,823 for a short-term stay, according to city records.

A new city law due to take effect in February could lead to a surge in the number of summonses issued. The law, which drew heavy support from the hotel industry, requires home-sharing websites such as Airbnb to transmit information about every short-term rental to the city. A lawsuit filed by the industry to stop the new law is pending in federal court in Manhattan, claiming that the city is protecting the hotel industry at the expense of hosts who are trying to make ends meet. The city’s multiple-dwelling law bars the rental of residential apartments and homes for fewer than 30 days unless the host is present.

“It’s war,” said Tanya Helfand, a lawyer who bought a 14th-floor studio at the Atelier earlier this year, only to discover parades of tourists rolling suitcases through the building on weekends. Disgruntled residents have filed a legal notice with the condo board. “At best the board is grossly negligent,” says the group’s attorney, Massimo D’Angelo, a partner at Adam Leitman Bailey. “And at worst [it’s] complicit in the operation of an illegal hotel.”