New York City sues landlord over alleged short term rental scheme
Since April 2023, the defendants received more than $1.3 million in payouts for approximately 1,400 illegal rental transactions, which Bineth directed to his corporate entities.
The City of New York announced a lawsuit on Thursday against a landlord and his associates for an alleged coordinated scheme to operate illegal short-term rentals in three buildings in Brooklyn and the Bronx, removing residential units from the long-term rental market and limiting already strained housing availability for New Yorkers.
The lawsuit alleges Chananya Bineth, his family members and business associates — Akiva Bineth, Maria Corina, Angelica Votta, Moshe “Avi” Katzburg and Gitty Bineth — submitted fraudulent documents to the Office of Special Enforcements claiming the co-defendants were full-time tenants in the buildings in order to obtain six registrations to host illegal short-term rentals in buildings Bineth owns, at 8658 16th Ave. and 114 Wilson Ave. in Brooklyn and 1701 Clay Ave. in the Bronx.
“When bad actors convert homes into illegal short-term rentals just to squeeze out profit, they’re taking homes away from New Yorkers who actually need a place to live,” said Mayor Zohran Mamdani. “This lawsuit is about making clear that our housing stock belongs to the people of this city, and we’re going to fight to keep it accessible, safe, and affordable for all.”
Since April 2023, the defendants received more than $1.3 million in payouts for approximately 1,400 illegal rental transactions, which Bineth directed to his corporate entities.
After obtaining the short-term rental registrations, the defendants received authorization to advertise the units for legal, hosted stays for up to two guests. According to the lawsuit, the defendants altered those listings on Airbnb and their own booking website to advertise illegal short-term rentals, including entire units with no host present, occupancy beyond the two-guest limit, or both, in violation of New York City law. Several of the defendants also used fake profile images and names on Airbnb listings, in some cases portraying individuals of a different race or gender.
The defendants allegedly housed guests in non-residential spaces in the buildings, including a mezzanine space, a commercially zoned office space, and a garage. The conversion of the registered dwelling units from permanent occupancy to short-term use also sidestepped New York City law by failing to meet required fire safety standards.
“Safeguarding the housing stock includes cracking down on the people and corporate entities that are committing fraud in order to take away units of housing for illegal short-term rentals,” said Christian Klossner, Executive Director of the Mayor’s Office of Special Enforcement. “In a city where 69% of residents are renters — and there is a housing shortage — our short-term rental laws help ensure that local residents have priority access to housing.”
The case is the latest enforcement action under Local Law 18, a 2022 measure that strengthens regulations of short-term rentals in New York City. The law requires hosts to register with the city, prohibits rentals in most entire units and mandates that hosts are present during a guest's stay.
City officials argue that strict enforcement is necessary to preserve the housing supply. OSE estimates that as many as 18,000 housing units were being used as illegal short-term rentals by 2018, prior to the 2022 reforms.
