April 22, 2014

More legal hot water for Airbnb

It's been a roller coaster of a week for Airbnb. The startup closed a deal for $450 million in funding, attaining a valuation it'd reportedly been chasing: $10 billion. But before the bubbly had time to settle in San Francisco, bad news came from New York, where an affidavit was filed against Airbnb claiming that the majority of its listings in New York are illegal.

New York State attorney general Eric Schneiderman Monday filed an affidavit with the state Supreme Court in Albany claiming that the majority of Airbnb listings in New York are illegal. Arguments are expected to begin tomorrow.

Schneiderman is seeking user data from Airbnb in a subpoena that was originally filed in October. There's speculation that since Airbnb, a fast-growing company that lets people rent out their homes or rooms, has been in negotiations with the Attorney General's office about the matter that a settlement fell apart.

The issue at hand is that subletting for less than 30 days is in general illegal for renters in New York who are not continually residing in their apartment. And, for Airbnb, plenty of the nearly 20,000 offerings--64 percent on January 31--listed on Airbnb in New York were for an "entire apartment," not a shared space, as the law would seem to mandate.

Airbnb claims it will pump $768 million into New York’s economy this year. The company has been under much scrutiny for not abiding by the same hospitality tax structures traditional hotels are subject to.

Get the full story at Inc.com

Read also "Airbnb Scrubs Thousands Of Listings From ‘Bad Actor’ Hosts Ahead Of NY Subpoena Hearing" at TechCrunch, "Airbnb Has Closed Its $500M Round Of Funding" at TechCrunch and "Airbnb offers to pay hotel taxes, NY hotel lobby says ‘no thanks’"


Subscribe to our daily email newsletter and stay tuned.