Largest Ever Settlement with City in Illegal Hotel Case - OSE

Office of Special Enforcement


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Largest Ever Settlement With City In Illegal Hotel Case

January 5, 2018
Owner to pay City $1.2 million in penalties and appoint a property manager to ensure lawful operation of buildings
NEW YORK-The Mayor's Office of Special Enforcement won the largest ever settlement in an illegal hotel nuisance abatement case, it was announced today.
The settlement requires that within 30 days of the settlement the building owner pay $1.2 million to the City and hire a professional and experienced property manager to ensure the lawful and safe operation for each of the four buildings for a period of three years.
Christian Klossner, Executive Director of the Mayor's Office of Special Enforcement, said, "By exacting steep penalties and requiring landlords to hire law-abiding property managers, we will stop property owners who fail to obey the law. This case is a good example of the work we do to protect permanent housing, New Yorkers and visitors from the dangers of illegal hotels."
"Illegal hotels like the ones at 334 and 336 West 46th Street have negatively impacted my district and the city as a whole. In addition to reducing affordable housing opportunities, they intensify the housing crisis across our city and pose a grave danger to their occupants, who are often forced to live in unsafe conditions," said Council Speaker Corey Johnson. "I thank the Mayor's Office of Special Enforcement for their continued hard work to protect permanent housing. The Council remains committed to reducing illegal hotels in New York City, so that everyone has a chance to live in an environment that is safe and follows regulations."
The settlement also permanently prohibits owners from advertising, booking, permitting, conducting and maintaining illegal transient occupancy (less than 30 days) at the four buildings.
In addition, for three years after the execution of the stipulation of settlement and consent judgment, the building owners shall provide the City with quarterly reports of its rental and occupancy records to help ensure that no unlawful transient occupancies reoccur in the buildings.
The City reserves its rights to conduct unannounced inspections of the buildings as it may deem necessary and appropriate under the circumstances
The case centered on four midtown buildings owned by Salim Assa, owner and principal of the corporate entities in charge of 15 West 55th St., 19 West 55th St., 334 West 46th St., and 336 West 46th St., which amassed hundreds of complaints and safety violations between 2013 and 2015.
The City commenced legal action on February 5, 2015. As violations continued, the New York State Supreme Court granted the City's motion for civil contempt and appointed an independent receiver to take operational control of two of the midtown buildings when their owners' failed to comply with a court order stating that they must stop permitting rentals of permanent residential units as illegal hotel rooms.
With the agreement, the receivership will be suspended.
The settlement was approved by Judge James d'Auguste on January 2.
The case was brought to the City's attention by tenants and residents who vigorously monitored and reported illegal conditions.
"Once again, the city's Office of Special Enforcement has gone to bat to preserve affordable housing units and punish those who are using Airbnb to run illegal hotels," said Manhattan Borough President Gale A. Brewer. "Holding landlords to account like this will help prevent the further diminishment of affordable housing stock."
State Senator Liz Krueger said, "Today's announcement is excellent news, and I congratulate OSE on a job well done. For years my constituents at 15 and 19 West 55th Street have lived through hell because of the actions of their landlord, Salim Assa. But those same tenants were dogged in the pursuit of their rights, and worked closely with their elected officials and the City to ensure that justice was served. This forceful settlement should give hope to tenants around the city, and give pause to unscrupulous landlords trying to replace real New Yorkers with illegal short-term rentals."
State Senator Brad Hoylman said, "Illegal hotels threaten the affordability of our city. We must protect tenants from landlords who use illegal hotels to force out long-time tenants and drive up rents. I'm thankful to Mayor de Blasio and OSE for their efforts to crack down on bad landlords in my district. Today we're sending a strong message that New York will not tolerate attempts to flout the law at the expense of tenants."
"These building owners are a real menace to the community, with no respect for people or the law. The Mayor's Office of Special Enforcement has done a great job, investing resources and working with real dedication. The residents, the local elected officials, and the City worked together and got results," said Assembly Member Richard N. Gottfried, who represents the area and was the author of the 2010 amendments to the Multiple Dwelling Law addressing the illegal hotel issue.
"Illegal hotel operators are on notice: if you break New York's law that protects tenants and affordable housing, you will face severe and painful consequences. Given the seriousness of the housing crisis we face here in New York, the punishment certainly fits the crime. I look forward to working with my colleagues to continue to pass legislation to make it easier for us to crack down on illegal hotels," said Assembly Member Linda B. Rosenthal.
Council Member Helen Rosenthal said, "The work the Office of Special Enforcement does to protect our rental housing stock from illegal conversion is of critical importance as this city faces an affordability crisis. This settlement is yet another example of the innovative and effective actions OSE has taken under the leadership of Mayor de Blasio and Executive Director Klossner. For too long, these large-scale illegal hotels have operated with impunity. This is exactly the sort of precedent-setting action that is needed to turn that tide."
"Thanks to OSE, the illegal hotels and negligence caused by landlord Salim Assa end today. My constituents and the tenants at 15 W. 55th St. and 19 W. 55th St. can finally feel safe at home," said Council Member Keith Powers.
Betsy Eichel, tenant organizer for Housing Conservation Coordinators, said, "The rise of platforms like Airbnb that make it easy for people to rent rooms in residential buildings has presented many challenges to tenants throughout the city, and particularly on the west side of Manhattan. Long-time residents feel unsafe as strangers come in and out of their buildings. Landlords push out permanent tenants to take advantage of the greater profits that come from short-term guests. The tenants of 15-19 West 55th Street found themselves facing both of these issues, but with the help of tenacious advocates, attorneys and the Mayor's Office of Special Enforcement, they were able to shut down the illegal hotel business in their building for good. This is a huge victory for tenants."
"This joint effort by City agencies and local organizations is a classic template how tenants under siege from unscrupulous landlords and illegal hotels can solve their problems. We encourage more tenant groups to step up, reach out, and fight back! Call 311," Tom Cayler, West Side Neighborhood Alliance (WSNA), Illegal Hotel Committee.
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