Landlord Fined $48,000 for Tenants' Illegal Short-Term Rentals

DOB issued violation notices to landlord for using three residential apartments in a building for transient occupancy. At a hearing, DOB's inspector testified that he gained access to the apartments and spoke with the short-term occupants, who told him that they had booked one-week reservations through online services. None of the prime tenants stayed in the apartments with the guests. The building super gave them the keys when they arrived. Landlord claimed that it was unaware that tenants had illegally arranged the short-term rentals. It didn't renew two of the tenants' leases and brought an eviction proceeding against the third tenant. All three apartments had now been re-rented. The ALJ ruled against landlord and applied daily penalties because the short-term rentals continued for more than 45 days. Landlord was fined $48,200.

Landlord appealed and lost. Landlord argued that it shouldn't be responsible for tenants' unlawful activities and that the violation notices didn't adequately advise landlord of the possibility of daily penalties. Even if tenants caused the violations, landlord was responsible under Admin. Code Section 28-301.1 for maintaining the building in a safe and code-compliant manner. Although the DOB inspector should have checked the box on the violation notice warning of additional daily penalties, the daily penalties were still permitted under Admin. Code Section 28-202.1, and landlord received proper notice. Because more than one apartment was involved, the violation was considered hazardous under Admin. Code Section 28-201.2.1(16) and daily penalties were triggered. Landlord also didn't prove when the violation was corrected, so the 45-day penalty period was correctly applied.

Mosco Holding LLC: ECB App. No. 1500169 (4/30/15) [5-pg. doc.]