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Almost two and a half years ago the board of an eleven-unit condominium in East Harlem discovered that Kwame Leslie Dougan, the owner of a ground-floor apartment, was renting his unit on Airbnb. The board saw his marketing on the Airbnb site, and also found a lockbox containing keys to the building’s front door located on the exterior window outside Dougan’s apartment. The board instructed its attorney to notify Dougan that he was breaching the bylaws, and over the years numerous motions were filed to compel him to stop this behavior.

The board had spent $37,741.85 on attorney fees over this period trying to get Dougan to stop the short-term rentals. He clearly violated the condo’s bylaws, and the court had ordered a cease and desist order to him. This case sought to compel Dougan to reimburse the condominium for the legal fees it had spent.

When negotiating the terms of a work letter with a tenant, don’t just agree to do a particular item of work “to code,” without listing any specifics or limitations. When not properly defined or limited, the phrase “to code” can be the source of confusion, miscommunication, and litigation.   

295 Greenwich Court Condominium, LLC. v. Consolidated Edison Company of New York, Inc.

WHAT HAPPENED  The Greenwich Court Condominium consists of two red-brick buildings at 275 and 295 Greenwich Street, built in the mid-eighties. In October 2017, NYC excavated the street for a new gas main in front of 295 Greenwich Street, at which time the Condo noticed major corrosion on the exterior of three water pipes servicing the building and steam escaping from steam mains owned by Con Edison close to the corroded pipes. It hired a contractor to make emergency repairs for $116,892. When NYC excavated the street in front of 275 Greenwich Street in January 2018, the Condo observed similar extensive corrosion under similar circumstances, i.e., escaping steam hitting the water pipes servicing 275 Greenwich. They replaced those pipes on an emergency basis as well at a cost of about $98,000.

Mayor Eric Adams and New York City Mayor's Office of Special Enforcement (OSE) Executive Director Christian J. Klossner recently announced a new lawsuit to shut down an illegal short-term rental operation at a building located in Turtle Bay.

According to the lawsuit, a licensed real estate broker and the building owner used a number of LLCs they control to run a complex and illegal short-term rental operation utilizing online lodging websites such as Airbnb. Between January of 2018 and March of 2022, Airbnb records show that the platform disbursed $2 million in payments to the broker for short-term rentals at six buildings throughout the city, including at least $987,729 from the building targeted in the lawsuit.

Q&A: Is there a potential fair housing problem with advertising online that we have, say, two available units at our property, when in fact we have, say, five units? If someone comes to the property, we will show all five units. But we want to show online a more limited supply to create a sense of urgency and demand. Also, some units may be under renovation and we’re not exactly sure when they’ll be available.

Put another way, can we block available units from being displayed online, when we will show these units to people who come to the property in person?

HUD recently announced that it has entered into a Voluntary Compliance Agreement with a New York City-based site. The site provides affordable subsidized units though the Section 8 Housing Assistance Payment Program and the Section 202 Supportive Housing for the Elderly Program.

The agreement arose from a compliance review that was conducted by HUD’s Office of Fair Housing and Equal Opportunity (FHEO) under Title VI of the Civil Rights Act of 1964.

The Federal Housing Finance Agency (FHFA) recently published Fannie Mae’s and Freddie Mac’s Underserved Market Plans for 2022–2024. The plans outline how each firm intends to meet its obligations under FHFA’s Enterprise Duty-to-Serve Rule.

The context: Fannie Mae and Freddie Mac initially submitted their 2022–24 plans in May 2021, but FHFA rejected both plans in October, saying they did not sufficiently support affordable housing activities. The Duty-to-Serve program requires Fannie Mae and Freddie Mac to facilitate a secondary market for mortgages on housing for very low-, low-, and moderate-income families in: Manufactured Housing, Affordable Housing Preservation, and Rural Housing.

The pandemic has illustrated the need for landlords and tenants to be flexible and work together to find solutions to leases that have become disadvantageous. One approach is to enter into a buy-out agreement allowing the tenant to end the lease early in exchange for an agreed-to sum of money.

The central issue in buy-out negotiations is how much the tenant should pay for the right to end the lease before the term expires. The stronger the market, the lower the buy-out price. Explanation: It’s easier to replace a tenant, often at a higher rent, when the market is strong. Replacing tenants is more challenging in a soft market.