Hell's Kitchen Owners Ran Airbnb Out Of Stabilized Units: Lawsuit

HELL'S KITCHEN, NY — The city is taking the owners of three Hell's Kitchen building owners with a history of harassing tenants to court for running an illegal short-term rental operation out of the buildings, according to a lawsuit filed this week in Manhattan Supreme Court.

City lawyers claimed that at least 11 units in 410 W. 46th St, 412 W. 46th St. and 452 W. 36th St. were advertised on short-term rental sites such as Airbnb, VRBO and Homeaway as building owners let the properties fall into neglect. The lawsuit was first reported on by Commercial Observer.

The apartments that were advertised for short-term rentals should have been used for permanent housing and were all subject to rent stabilization, according to the city's lawsuit. Building owners have been renting out the units on a short-term basis for seven years, city lawyers claim.

"Illegal, deceptive, and hazardous transient occupancies have continued in at least 11 out of the 50 apartments (22%) in the Subject Buildings during Defendants’ ownership and management despite the CITY’s extensive administrative efforts to terminate such unlawful activities and their resulting adverse conditions," the lawsuit reads.

The city is taking the building owners to court because previous efforts to return the units to permanent housing have failed. Over the past seven years, the city has conducted 17 inspections of the properties and issued nearly 100 fines for "illegal transient occupancy" that carry penalties of more than $250,000.

Defendants in the lawsuit include: Keystone Management, Highpoint Associates XII LLC, Sereno Partners LLC, Daniel Ohebshalom, Richard Lagana and the buildings themselves. The lawsuit lists at least 10 John/Jane Doe defendants due to "fictitiously named parties" or parties with unknown names.

Check out the full lawsuit below: