Airbnb runs afoul of New York law

If you’re a New York City dweller looking to make a quick buck by renting out your apartment for a few nights on Airbnb, be careful of nosy neighbors. If they file a complaint against you, you could rack up thousands of dollars in fines.

One New Yorker is the unfortunate example of the state’s crackdown on short-term rentals. Web designer Nigel Warren rented out his room on Airbnb last September, making $300 on his guest’s three-night stay. On Monday, Warren was fined $2400 for violating New York’s laws against turning apartments into hotel rooms. Airbnb lets users rent out their homes (or in some cases, castles and treehouses) for a few nights, a few weeks, or even a few months. It's designed for people who are going out of town and want to supplement their income.

Airbnb is lobbying legislators in states like New York to change regulations in an effort to protect its users from the situation Warren is facing. In this instance, the company intervened as an interested party. An Airbnb spokesman said the company thinks the state's decision is wrong.

Warren was originally looking at fines as high as $30,000, so $2400 is a little bit easier to stomach. He can still appeal the decision. In an emailed statement, Warren said he doesn’t want the ruling to “stand in the way of what I think is, overall, a great start-up.”

Applying old laws to a new economy

New York’s multiple dwelling law, which prohibits renting out spaces in large buildings for less than a month, is clearly intended to keep landlords from converting residential buildings into hotels, but, as many start-ups in the sharing economy space have found, most states aren’t taking new tech into account when enforcing the laws.

“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,” Airbnb said in a statement. “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.”

Airbnb is facing the same challenges that ride-sharing and taxi apps have dealt with over the last couple of years. The heart of the matter is whether companies that provide a platform for people to do business with one another, such as finding a ride to the airport or renting out a room for the night, have to comply with the same rules that govern cab companies and landlords. The tech companies who being slapped on the wrist left and right argue that they are just the website that people use to exchange goods and services. Lyft argues that it is not a transportation service, and Airbnb says it is not a hotel or a landlord.

But Airbnb cautions users to check their local laws before offering to become a host.

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