Mayor Eric Adams and New York City Mayor’s Office of Special Enforcement (OSE) Executive Director Christian J. Klossner announced a new lawsuit Tuesday to shut down an illegal short-term rental operation at a building located in Turtle Bay.
According to the lawsuit, defendant Arron Latimer — a licensed real estate broker — as well as building owner Apex Management and managing member Esther Yip used a number of LLCs they control to run a complex and illegal short-term rental operation at 344 East 51st Street utilizing popular online lodging websites, like Airbnb.
The suit represents the city’s first lawsuit against a short-term rental operation identified using data obtained through the city’s law — Local Law 146 of 2018, amended by LL 64 of 2020 — requiring online short-term rental platforms to regularly report data on bookings to the city.
“Safe, stable, and affordable housing is fundamental to a prosperous city, so we will not allow bad actors to deplete our housing stock and undermine our hospitality sector,” said Adams. “For years, Arron Latimer and the other defendants used fake host profiles on popular sites like Airbnb to deceive and lure unsuspecting guests into paying for substandard lodging at illegal rental listings. Not only did they unlawfully pocket millions, but they endangered guests and deprived New Yorkers of an entire building’s worth of long-term housing.
The suit alleges that the three defendants continued to run their unlawful operation despite multiple enforcement efforts from the city, which issued violations for the illegal short-term rentals and for the building’s numerous hazardous conditions, including an inadequate fire alarm system, an inadequate fire sprinkler system, and a failure to provide required means of egress.
Between January of 2018 and March of 2022, Airbnb records show that the platform disbursed $2 million in payments to Latimer for short-term rentals at six buildings throughout the city, including at least $987,729 from the building targeted in the lawsuit on East 51st Street. During this timeframe, Latimer used more than 26 distinct host accounts, operated more than 78 listings, conducted more than 2,200 transactions, and deceived more than 6,500 guests.
The city’s suit further asserts Latimer intentionally misled and endangered consumers, in potential violation of the city’s consumer protection law. Additionally, guest reviews described the location as “astonishingly dirty,” with complaints of mold, soiled linens, and blood stains, as well as robotic or automated communication with their host. Other guests advised that future visitors should “be aware that the address or listing is different than the actual location.”
New York City’s short-term rental registration law — which goes into effect in January 2023 — will require rental hosts in New York City to register with the city and will prevent platforms, like Airbnb, from processing transactions unless the registration information matches a city database.
In a statement sent to the AmNews, Airbnb said the host Adams is referring was banned months ago.
“We commend Mayor Adams for taking swift action on illegal hotel operators who flout the rules,” said Nathan Rotman, Airbnb Public Policy Regional Lead. “Airbnb currently shares information with the City, and looks forward to working with the City and State to build an effective and transparent regulatory framework to differentiate between the responsible Hosts who should be protected under the law and operators of properties like this who have no place on our platform.”
Officials from Airbnb added that they previously sent a cease and desist letter to the host and removed all associated accounts and listings from our platform. In June 2020, Airbnb reached an information-sharing agreement with New York City, and subsequently began complying with the city’s short-term rental data reporting law, which regularly provides the city with the insights it needs to effectively regulate short-term rentals.