Adams Administration Announces Office of Special Enforcemeht Lawsuit Against Illegal Short-Term Rental Operation

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Adams Administration Announces Office of Special Enforcemeht Lawsuit Against Illegal Short-Term Rental Operation

Suit Alleges That Gokhan Simsek and Stay and Smile LLC Generated $2.4 Million by Illegally Converting Permanent Housing Units in 58 Buildings

New York – New York City Mayor's Office of Special Enforcement (OSE) today announced a new lawsuit to permanently shut down an illegal short-term rental operation. The suit alleges that between 2020 and 2023, Gokhan Simsek and Stay & Smile ("the defendants") operated illegal short-term rentals in 58 buildings in Manhattan, generating approximately $2.4 million in payouts for 6,800 illegal short-term rentals.

The city identified the illegal operation through both its complaint-driven field inspections and transaction records obtained from booking platforms Airbnb and Booking.com under the Booking Service Data Reporting law, before the city's Short-Term Rental Registration law went into effect. In March of 2023, the defendants were made aware that OSE was investigating their illegal activity, and in June of 2023, they received cease-and-desist letters from OSE. Upon receipt of the letters, the defendants appeared to stop their illegal short-term rental operation. However, additional reporting law data shows the defendants continued to conduct short-term rentals until the registration law, and the booking platforms' compliance with that law prevented the defendants from continuing their illegal operation.

"With our short-term rental reporting and registration laws, we are stopping illegal operators from taking away our safe, stable, and affordable housing," said New York City Mayor Eric Adams. "Today's lawsuit sends a clear message that we will not allow you to use our valuable housing stock for unlawful personal gain."

"Stay & Smile and Gokhan Simsek profited from their short-term rentals while deceiving and endangering guests until we identified them using the city's strong booking service data reporting requirements," said Christian Klossner, Executive Director of the Mayor's Office of Special Enforcement. "Defendants continued despite enforcement until the registration law brought them to a stop. This lawsuit highlights the importance of robust reporting requirements for booking platforms and short-term rental registration in combatting illegal short-term rentals and the attendant loss of housing."

"The city's reporting law and short-term rental regulations help curb illicit activity among bad actors, such as Stay and Smile, and other entities operating in violation of the longstanding housing laws," said Mayor's Office of Criminal Justice Director Deanna Logan. "Our work under the framework of this robust regulation is one of the tools employed by Mayor Adams in his commitment to alleviate the housing crisis through the preservation of the city's housing stock for long-term and permanent residents."

"Defendants in this case brazenly defied the city's enforcement efforts, posing a risk to guests and residents through their illegal rentals," said Acting Corporation Counsel Muriel Goode-Trufant. "This lawsuit underscores that no one is above the law and the city's serious commitment to holding illegal operators fully accountable."

New York City's booking service data reporting law requires online short-term rental platforms to periodically provide OSE with information about transactions for certain listings. These reports include the physical address of the short-term rental as reported to the booking service by the host, the URL of the short-term rental listing, details pertaining to the scope of the short-term rental transaction, and information relating to the identity of the host, including contact information and associated bank accounts to which payouts were made.

New York City's short-term rental registration law, which went into effect in January 2023, requires rental hosts in New York City to register with the city and prevents platforms like Airbnb from processing transactions unless the registration information matches a city database.

The NYC Law Department authorizes and reviews all lawsuits brought by OSE to enforce the city's laws.

About the Mayor's Office of Special Enforcement

The Mayor's Office of Special Enforcement (OSE), positioned within the Mayor's Office of Criminal Justice (MOCJ), plays a crucial role in ensuring the safety of city residents by overseeing various illegal and unregulated industries. The office is tasked with enforcing a diverse range of laws and regulations aimed at maintaining a safe and livable environment. OSE conducts research on quality-of-life issues, with a focus on areas such as adult use locations, trademark counterfeiting, bazaars, and illegal conversions of apartment buildings into hotels. Additionally, OSE is responsible for the enforcement of laws and regulations on short-term residential rentals and the education of the public on these laws and subsequent enforcement. For more information, visit nyc.gov/ose.