Trust for the Benefit of Goldstein v. Lipetz
53 N.Y.S.3d 296
N.Y. App. Div.2017Background
- Tenant (defendant) was a long‑term (since 1973) rent‑stabilized occupant of a cooperative unit; plaintiff is the trust that holds the unit’s shares and proprietary lease.
- From March 2011 to August 2012 defendant listed the unit on Airbnb, hosting 93 paying guests for a total of 338 days and charging $95/night (single) and $120/night (couple).
- Defendant’s stabilized rent was $1,758.01/month (≈ $57.80/day); RSC permits a 10% premium for lawful furnished sublets (≈ $63.58/day).
- Airbnb records showed defendant received $33,592 gross for the hosting period; comparing revenue to pro rata regulated rent for days hosted produced a 72% aggregate profit and ≈56% aggregate overcharge above the lawful 10% premium.
- Plaintiff sought declaratory relief terminating the lease, ejectment, and fair‑use damages; the trial court denied summary judgment to both sides; on appeal the majority granted plaintiff summary judgment terminating the lease and awarding ejectment and liability for use and occupancy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether short‑term paying guests were subtenants or "roommates" under RPL §235‑f / RSC §2525.7 | Guests were subtenants via Airbnb bookings and were subject to subletting rules | Guests were "roommates" exempt from sublet rules | Subtenants as a matter of law; roommate defenses rejected |
| Whether defendant’s conduct constituted unlawful profiteering justifying lease termination without right to cure | Systematic short‑term market‑rate subletting produced substantial unauthorized profits (72% aggregate), so profiteering warrants termination without cure | Profiteering not established; subletting was insubstantial relative to 40+ year tenancy and some months did not exceed legal rent+10% | Profiteering found as a matter of law: 338 days over 18 months is sustained and substantial; termination granted without cure |
| Whether plaintiff had notice or consent via building management (apparent/actual authority) | No admissible evidence that plaintiff or its agent (Samson) knew before June 2012; building manager was agent of cooperative, not plaintiff; no basis for apparent authority | Defendant claims she informed building managing agent, who said it was OK, and that Samson knew via visitor logs; thus plaintiff had notice/consent | No admissible evidence that plaintiff or its agent had prior knowledge or consent; visitor logs to cooperative manager do not bind plaintiff; apparent authority unsupported |
| Whether plaintiff failed to serve required notice to cure or otherwise barred eviction | Profiteering removes right to cure; no cure required and notice to cure not necessary | Plaintiff did not serve a notice to cure; statutory/process defenses preclude eviction | Prior case law: where profiteering established, tenant not entitled to cure or a notice to cure; notice defense dismissed |
Key Cases Cited
- Gruber v. Anastas, 100 A.D.3d 829 (2d Dep't 2012) (subletting at excessive rents can support lease termination)
- 220 W. 93rd St., LLC v. Stavrolakes, 33 A.D.3d 491 (1st Dep't 2006) (transient short‑term occupants treated as subtenants rather than roommates)
- BLF Realty Holding Corp. v. Kasher, 299 A.D.2d 87 (1st Dep't 2002) (unlawful commercial subletting supports eviction)
- Continental Towers Ltd. P’ship v. Freuman, 128 Misc.2d 680 (App. Term, 1st Dept. 1985) (profit‑making subletting undermines rent stabilization and may be non‑curable)
- Cambridge Dev., LLC v. Staysna, 68 A.D.3d 614 (1st Dep't 2009) (short‑duration overcharge may be curable)
- Ariel Assoc. v. Brown, 271 A.D.2d 369 (1st Dep't 2000) (overcharges cured by refund can weigh against eviction)