Defendants Netted More Than $1.3 Million in Payouts from Illegal Short-Term Rentals at Two Entire Buildings in Brooklyn, Separate Unit in the Bronx
Lawsuit Is Latest Action by the Mayor’s Office of Special Enforcement to Protect the City’s Housing Stock & Preserve Affordability for New Yorkers
Photos of illegal short-term rental listings, courtesy NYC Office of Special Enforcement
NEW YORK – Mayor Zohran Kwame Mamdani’s Office of Special Enforcement (OSE) today announced a lawsuit against a landlord and his associates for an alleged coordinated scheme to operate illegal short-term rentals in three buildings in Brooklyn and the Bronx, removing residential units from the long-term rental market and limiting housing availability for New Yorkers.
“When bad actors convert homes into illegal short-term rentals just to squeeze out profit, they’re taking homes away from New Yorkers who actually need a place to live,” said Mayor Mamdani. “This lawsuit is about making clear that our housing stock belongs to the people of this city, and we’re going to fight to keep it accessible, safe, and affordable for all.”
“Safeguarding the housing stock includes cracking down on the people and corporate entities that are committing fraud in order to take away units of housing for illegal short-term rentals,” said Christian Klossner, Executive Director of the Mayor’s Office of Special Enforcement. “In a city where 69% of residents are renters — and there is a housing shortage — our short-term rental laws help ensure that local residents have priority access to housing.”
“Every unit converted into an illegal short-term rental is a home taken away from a New Yorker who needs it,” said Deputy Mayor for Economic Justice Julie Su. “This administration will not allow bad actors to game our housing system for profit while families struggle to find a place to live. We are committed to protecting our housing stock and ensuring that those who break the law are held accountable.”
“Illegal short-term rentals take homes off the market and put tenants and neighbors at risk. I’m grateful to the Office of Special Enforcement for their action to enforce the law and ensure that property owners in New York City are held to account,” said Leila Bozorg, Deputy Mayor for Housing and Planning.
“Today is the latest example of the City working to ensure New Yorkers have safe, stable places to live,” said Deanna Logan, Director of the Mayor’s Office of Criminal Justice. “Our Office of Special Enforcement is strengthening its efforts to deter conversions of permanent housing to illegal short-term rentals while expanding education for legal hosts to support affordability in our communities. We are making it clear that there will be consequences for those that attempt to exploit our housing market for profit at the expense of New Yorkers.”
Verified complaint available on NYcourts.gov
The lawsuit alleges Chananya Bineth and his family members and business associates — Akiva Bineth, Maria Corina, Angelica Votta, Moshe “Avi” Katzburg, and Gitty Bineth — submitted fraudulent documents to OSE claiming the co-defendants were full-time tenants in the buildings in order to obtain six registrations to host illegal short-term rentals in buildings Bineth owns, located at 8658 16th Avenue and 114 Wilson Avenue in Brooklyn and 1701 Clay Avenue in the Bronx.
Since April 2023, the defendants received more than $1.3 million in payouts for approximately 1,400 illegal rental transactions, which Bineth directed to his corporate entities.
After obtaining the short-term rental registrations, the defendants received authorization to advertise the units for legal, hosted stays for up to two guests. According to the lawsuit, the defendants altered those listings on Airbnb and their own booking website to advertise illegal short-term rentals — including entire units with no host present, occupancy beyond the two-guest limit, or both — in violation of New York City law. Several of the defendants also used fictitious profile images and names on Airbnb listings, in some cases portraying individuals of a different race or gender.
The defendants allegedly housed guests in non-residential spaces in the buildings, including a mezzanine space, a commercially zoned office space, and a garage. The defendants’ conversion of the registered dwelling units from permanent occupancy to transient use also violated New York City law by failing to meet required fire safety standards.
New York City’s short-term rental laws, which prohibit the short-term rental of entire units and limit the number of paying guests, are designed to protect the city’s housing stock by ensuring residential units remain available for permanent occupancy. The city remains dedicated to utilizing all available enforcement tools, including Local Law 18, to ensure compliance with laws governing the short-term rental market, hold violators accountable for seeking to profit at the expense of tenants, and deter illegal activity that reduces housing availability for New Yorkers.
Frequently Asked Questions (FAQ)
What are the eligibility requirements to become a registered short-term rental host?
To be eligible for short-term rental registration, a host must be a natural person and the permanent occupant of the dwelling unit. A host must not be prohibited by the terms of a lease or other agreement from conducting short-term rentals in the unit. Applicants will be required to certify that they meet these requirements and provide documents to prove their identity and their occupancy status.
You are not eligible for registration if the building’s owner has put their building on the Prohibited Buildings List, which is maintained by OSE and searchable as a database, or if the unit’s rent is regulated (e.g., rent controlled, rent stabilized, under a regulatory agreement).
Are entire unit short-term rentals permitted anywhere?
Yes, but not in people’s homes. Short-term rentals in entire units are only permitted in “Class B” multiple dwellings, which have been approved by the City of New York for legal short-term occupancies.
A Class B multiple dwelling is defined as “a multiple dwelling which is occupied, as a rule, transiently, as the more or less temporary abode of individuals or families who are lodged with or without meals. This class includes hotels, lodging houses, rooming houses, boarding houses, boarding schools, furnished room houses, lodgings, club houses, and college and school dormitories.” This definition does not include apartments, single-family homes, or two-family buildings.
About Local Law 18
Since the late 1960s, New York City’s laws have restricted rentals of less than 30 days in homes to two guests staying with permanent occupants. OSE estimates that by 2018, as many as 18,000 units of permanent housing were being used as illegal short-term rentals. In 2022, Local Law 18 created a new registration and verification program to protect New York City’s housing stock.
The law: 1) requires hosts to register with OSE and operate the rentals in compliance with the city’s existing laws; 2) prohibits registration for rent-regulated and NYCHA units; 3) created a mechanism to prevent registrations from being issued in buildings where short-term rentals are prohibited by the owner; and 4) mandates that booking services verify the status of a registration before processing transactions. More than 3,000 host registrations have been granted, and more than 14,000 property owners and managers have placed their buildings on the prohibited list.
The full text of Local Law 18 can be accessed and downloaded online at www.nyc.gov/assets/specialenforcement/downloads/pdfs/LL18-of-2022.pdf.
About the Mayor’s Office of Special Enforcement
The Mayor’s Office of Special Enforcement (OSE) is an innovative task force that addresses public safety and quality-of-life issues related to illegal and unregulated industries. The multi-agency team is currently comprised of legal, inspection, and investigation team members from the Mayor’s Office of Criminal Justice (which oversees OSE), the Law Department, the Department of Buildings, the Fire Department, and the Sheriff’s Offices. The office’s main focus has been preserving New York City’s housing stock, which has a vacancy rate of 1.4%. OSE also conducts illegal massage parlor inspections and has handled enforcement of an array of special projects, such as closing counterfeit product bazaars and overseeing programs to ensure compliance with COVID-era health and consumer protections. For more information, visit nyc.gov/ose.