- A $US21 million lawsuit is accusing a web of real estate brokers of using Airbnb to illegally rent over 250 listings to nearly 76,000 unknowing guests.
- The lawsuit, filed in New York City on Jan. 14, accuses Metropolitan Property Group, a real estate brokerage firm, of using a litany of fake identities to rent out 130 former apartment listings, which were converted from permanent residences to accommodate travellers – including a whole entire building in East Harlem.
- New York City is Airbnb’s largest market in the US, with over 50,000 listings. It is illegal to rent out an apartment for fewer than 30 days in some buildings unless the permanent resident is present.
A $US21 million lawsuit filed in New York City is accusing a prominent real estate brokerage firm of using a sophisticated litany of fake identities in order to transform 130 apartment listings into traveller accommodated suites – including an entire building in East Harlem – featured on Airbnb.
The lawsuit, the largest of its kind being brought by the city, lists Metropolitan Property Group as its primary defendant. The group is accused of illegally advertising 250 short-term rentals via 101 host accounts to nearly 76,000 unknowing guests.
“[…] Almost 13,700 illegal short-term rental reservations took place, generating a total of approximately $US21 million in revenue from 2015 to 2018,” the lawsuit said about listings associated with MPG.
In New York, it is illegal to rent out apartments, in most buildings, for less than 30-days unless the primary tenant is present. Airbnb said commercial operators, such as those detailed in the lawsuit, are not common on its site via a statement made to The New York Times.
Though, many Airbnb users may already be aware of the sophisticated web of real estate brokers on the platform. Some listings in any one building can look remarkably the same, in terms of decor and descriptive language, and feature the same host. Some listings in New York City even include instructions to guests to not disclose they are staying in an Airbnb to neighbours.
The Mayor’s Office of Special Enforcement, which enforces short-term listings on sites such as Airbnb and HomeAway, found one phone number associated with at least 19 different Airbnb host accounts, linking several defendants listed in the lawsuit.
And though the lawsuit does not list Airbnb as a defendant, it marks a significant win for sceptics who have been outspoken about the platform and how some utilise it.
“This case is a clear example of just one thing: the ongoing need for a comprehensive, statewide bill that would provide for strict recourse against the few bad actors while protecting the rights of thousands of regular New Yorkers who are responsibly sharing their home,” said Head of Northeast Policy for Airbnb Josh Meltzer in a statement to Business Insider.
“Airbnb supports legislation in Albany that would do just that and we invite the Office of Special Enforcement to come to the table and work with us on a real path forward.”
New York City is Airbnb’s largest market in the US, with over 50,000 listings.
The lawsuit comes less than two weeks after a federal judge blocked a New York City law from taking effect that would require Airbnb to hand over data each month about people who use its apartment listing service. The law was passed last July and was scheduled to go into effect next month.
Airbnb was last valued at $US31 billion in 2017 and has said it plans to go public in mid-2019.
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