New York City's Short-Term Rental Regulations: What You Need to Know in 2023
As of September 5, 2023, the landscape of short-term rentals in New York City has shifted significantly under Local Law 18, adopted on January 9, 2022. These regulations have far-reaching implications for both landlords of short term rental units and booking service platforms like Airbnb and VRBO.
Local Law 18 in a Nutshell
Local Law 18 (LL18) mandates that short-term rental hosts register with the Mayor's Office of Special Enforcement (OSE) and prevents booking platforms from processing transactions for unregistered short-term rentals. A short-term rental is defined as any stay lasting less than 30 days.
Enforcement Phase Begins
September 5, 2023, marked the commencement of the initial enforcement phase of LL18 by OSE. This phase primarily focuses on collaboration with booking platforms to ensure they adhere to the city's verification system, verify transactions accurately, and cease processing unverified bookings. The aim is to create a more transparent and regulated environment for short-term rentals in the city.
Crucial Restrictions for Hosts
Under LL18, hosts face several critical restrictions:
Occupancy Limit: Short-term rentals can accommodate no more than two paying guests at a time.
Host Presence: Hosts are required to be physically present during the rental period.
Access to Entire Unit: The law mandates that all doors inside the dwelling must remain unlocked, allowing occupants access to the entire unit.
Failure to comply with these regulations can result in civil penalties, capped at either $5,000 or three times the revenue generated by the short-term rental for each violation. Importantly, these penalties do not extend to short-term tenants.
Prohibited Buildings List
LL18 also introduces the concept of a Prohibited Buildings list. This list comprises buildings where short-term rentals are categorically prohibited, either by existing laws (e.g., NYCHA properties or entire rent-regulated buildings) or through leases and occupancy agreements for the building.
Certain types of properties, such as "Class B" legal occupancy dwellings (including hotels, lodging houses, rooming houses, boarding houses, and boarding schools), are exempt from these regulations. Similarly, rentals for 30 consecutive days or more are not subject to LL18 restrictions.
Due Diligence Is Key
For real estate licensees contemplating listing a property for short-term rental in New York City, staying well-informed about these regulations is essential. Verifying that a unit has been correctly registered with the OSE is mandatory to avoid potential penalties and fines imposed by the New York State Department of State for licensing regulation violations.
