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Licensed Broker’s Illegal Airbnb Rental Ring Exposed: NY Officials Take Action

may have heard about the recent $845,000 settlement announced by the New York Department of State and the Mayor’s Office of Special Enforcement. This settlement marks the end of an illegal short-term rental Airbnb operation run by a licensed real estate broker in two Manhattan buildings.

City Crackdown Reveals $2 Million Airbnb Scandal in New York

Licensed Broker's Illegal Airbnb Rental Ring Exposed: NY Officials Take Action
Licensed Broker’s Illegal Airbnb Rental Ring Exposed: NY Officials Take Action

The investigation that led to this significant settlement was based on data obtained through New York City’s Booking Service Data Reporting Law. This law requires online short-term rental platforms to provide information about transactions for certain listings. As a result of this data, the Mayor’s Office of Special Enforcement initiated a lawsuit against the defendants, who had converted multiple permanent residential dwelling units in Manhattan for illegal short-term rentals at 311 East 51st Street and 207 West 75th Street.

Between 2019 and 2022, records show that the defendants received over $2 million from Airbnb for more than 550 short-term rentals involving more than 2,000 guests at the two buildings. In response to enforcement actions by the Mayor’s Office of Special Enforcement, the defendants removed all illegal listings and agreed to settle for a citywide permanent injunction and $845,000 in restitution.

The licensed real estate broker, Katherine Cartagena, also agreed to settle with the Department of State, Division of Licensing Services. The settlement acknowledges that Ms. Cartagena advertised illegal transient rentals in violation of the law. As part of the settlement, she agreed that if she engaged in such activities again, her real estate license would be revoked.

Licensed Broker's Illegal Airbnb Rental Ring Exposed: NY Officials Take Action
Licensed Broker’s Illegal Airbnb Rental Ring Exposed: NY Officials Take Action

Mayor Adams Declares War on Illegal Operators in Rental Crackdown

Secretary of State Robert J. Rodriguez emphasized the importance of collaboration between the Department of State and city partners in enforcing laws related to short-term rentals. Mayor Eric Adams highlighted the need for safe, stable, and affordable housing in the city and stated that the settlement sends a clear message that illegal operators will not be tolerated.

The Executive Director of the Mayor’s Office of Special Enforcement, Christian J. Klossner, commended the efforts to combat illegal short-term rentals and protect the city’s housing stock. The Office of Special Enforcement, along with the Department of State, worked diligently to investigate and hold the violators accountable.

The settlement showcases the city’s commitment to ensuring housing equity and safety for all New Yorkers. The use of short-term rental registration laws, combined with strategic legal and investigative efforts, has effectively brought another violator into compliance.

New York City’s laws regarding short-term rentals, including booking service data reporting and registration requirements, play a crucial role in preventing illegal operators from exploiting valuable housing resources for personal gain. The NYC Law Department oversees and reviews all lawsuits brought by the Mayor’s Office of Special Enforcement to enforce these laws.

This settlement serves as a reminder of the importance of upholding regulations in the real estate and rental markets to protect residents and uphold housing standards in New York City.

Get in touch with the NYS Department of State Press Office through email provided below for any of your inquiries 

Find Them

Email: press@dos.ny.gov

 

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