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For Airbnb Rental, NYC Tenant Fined $30K

By Deanne Katz, Esq. | Last updated on

Listing your home for rent on Airbnb sounds like a great way to make extra cash -- until you get slapped with an enormous fine for breaking the law.

Nigel Warren wanted to take advantage of Airbnb's easy rental system when he went out of town last September. So he listed his New York City apartment on the website and made $300 on a three-night rental.

Then he came home to a $30,000 fine from the city for violating state laws. Even worse for Airbnb users, it looks like New York isn't the only place with these types of restrictions.

Under New York law, it's illegal to rent out a single-family home, apartment, or room for less than 30 days if you aren't living there. Other cities and states have similar restrictions on short-term hotels that could get tenants and owners in trouble for using Airbnb, reports The New York Times.

Upon closer inspection, the laws make a good amount of sense. They aim to keep rental properties available and ensure that "hotels" comply with the fire code.

But that doesn't mean the punishments are in line with the offenses. In the case of Airbnb listers like Warren, the fines can far outstrip any potential profits.

Even if listing your apartment on Airbnb doesn't violate local laws, it could put your living situation in danger.

If you're a renter, micro-sublets could jeopardize your lease. That's because most rental agreements include a clause that limits your ability to sublet or have guests for long periods of time without your landlord's approval. So check your lease before you sign up.

But even homeowners can face consequences too. If you're part of a homeowners association, then you may face similar limits on short-term leases.

Violating those clauses could result in hefty fines, and those kinds of groups typically have a fair amount of power.

As for poor Warren, his case will go to a hearing on February 20. But at least he has some good legal representation to make the process a little easier.

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