Philadelphia Skyline

Tenant Paying $4/Day for Rent Stabilized Apartment Makes $255 Per Night on Illegal Short-Term Sublets

July 22, 2018

This is a story about one of the craziest illegal Airbnb cases I have worked on so far.[1]

In this case, the Rent Stabilized tenant, who had moved to Westchester, was simultaneously listing his apartment as three different rooms as short-term sublets. Indeed, he was simultaneously renting the apartment to three groups of guests at once. Tenant frequently had up to nine people staying in the apartment at a time. Over a 15-month period, tenant managed to get 78 reviews on the platform. Surveillance camera footage revealed that over the span of 29 days, unknown guests were seen exiting and entering the apartment 185 times.

But here is the insane part. According to the Airbnb data, tenant rented the three rooms of the apartment for nightly rates of $90, $88, and $77, plus cleaning fees. Sometimes he rented all three rooms simultaneously. Therefore, tenant often collected $255 per day. Tenant himself, however, was a recipient public assistance. Tenant’s portion of the rent for the apartment was a mere $125 per month; his per day cost for the apartment was $4.16. Therefore, tenant turned a profit of $250.84 a day, a 5929%.

It should not have surprised me when this tenant actually had the temerity to fight the case! The case did not go very far, however, before the tenant agreed to vacate. Even in situations where a tenant’s behavior is as egregious as this, I still favor settlement and mutually beneficial solutions for both sides. When the tenant moved out, the apartment was re-rented to a new Rent Stabilized tenant, someone who lives in the apartment and who follows the rules.

I will let you draw your own conclusions on the lessons garnered from this one.

Respectfully submitted,

[1] Some details changed to protect the innocent.

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