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Are short-term rentals legal in New York?

Sites such as Airbnb are not the only ways for people to capitalize on tourists who want to save money on hotel costs while visiting New York. As a landlord looking for more financial opportunities, you may be considering leasing your properties for temporary stays, such as weekends and summer vacations.

Before you do this, however, you need to know New York laws concerning short-term rentals. You do not want to end up using all your profits to pay heavy fines for breaking the law.

Rental distinctions

Your permanent tenants, those who stay for 30 consecutive days or more in a residential multiple-unit building, live in Class A dwellings. Those who stay in hotels and similar establishments are in Class B dwellings. Different laws, including for taxes and rates, regulate each type, so you cannot illegally use one for the other.

New York law

New York state prohibits most short-term rentals because they do not meet the requirements of the New York State Multiple Dwelling Law. They also bring negative effects such as decreased housing options for legitimate tenants, property damage and loss of tax revenue. As of 2016, it also became illegal to advertise for such rentals.

However, the law does allow for legal registration of short-term rental properties. The unit cannot be a single room occupancy and must have a bathroom, kitchen, functioning smoke detectors and proper insurance. It must also follow tax codes. Additionally, you can accept transient tenants into a unit you permanently occupy, as long as the guests have access to all areas of the property.

Making it legal

Because the laws for short-term rentals are very specific, it is best to seek help from a real estate attorney to ensure you do things legally. Furthermore, you should check that none of your tenants are renting out their apartments illegally or subletting without your permission.

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