Facebook
X
Pinterest
Copy Link
The idea of generating income from a property through short-term rental platforms – Airbnb, VRBO, and similar services – is appealing in New York’s high-cost housing market. The reality of what New York law permits, and the legal exposure for property owners who don’t understand those limits, is more complicated than most prospective hosts realize.
Here is what New York property owners need to know about short-term rentals before they list.
The Legal Landscape in New York City
New York City’s Local Law 18, which took effect in September 2023, effectively prohibits most short-term rentals of entire apartments or homes. The law requires hosts to register with the city, be present during all guest stays, and host a maximum of two guests at a time. Entire-unit short-term rentals – where the host leaves and guests occupy the unit independently – are prohibited in most circumstances.
Enforcement has been active. Platforms operating in New York City are required to verify host registration before accepting listings, and unregistered listings face removal. The practical effect is that the Airbnb-style short-term rental business model that works in other cities is largely non-viable for New York City apartment owners.
The Landscape in Long Island and Suburban New York
Outside of New York City, the regulatory picture varies significantly by municipality. Nassau and Suffolk Counties have individual town and village codes that govern short-term rentals, and these codes vary substantially from one municipality to the next.
Some municipalities require permits for short-term rentals. Others restrict them by zoning. Some HOA and condo association governing documents prohibit short-term rentals regardless of local law. Some co-op proprietary leases prohibit any subletting for any duration.
Before listing any property in Nassau or Suffolk County on a short-term rental platform, property owners should review their specific local code, their HOA or association governing documents, and their mortgage terms – some mortgage products include restrictions on rental activity.
The Mortgage and Insurance Complications
Most residential mortgages include language that requires the property to be used primarily as a residence. Operating a short-term rental business out of a property financed as a primary residence can, in some interpretations, violate the mortgage terms. While lenders rarely actively monitor this, a default on other terms of the mortgage can expose this issue.
Standard homeowner’s insurance policies typically do not cover incidents related to rental activity. A guest injury, property damage caused by a guest, or other liability arising from a rental stay may not be covered under a standard policy. Hosts who rent their properties should obtain either a short-term rental endorsement or a separate landlord/host policy that specifically covers rental activity.
As a Buying Factor
For buyers who are specifically evaluating a property for short-term rental income potential, the legal landscape described above is due diligence information that should be confirmed before purchase – not assumed. Buyers who purchase a property based on short-term rental income projections and then discover the municipality prohibits it have no recourse after closing.
Ask specifically. Confirm with the local municipality. Review the HOA documents. Read the zoning code. Do not rely on the fact that previous owners were Airbnb-ing successfully as evidence that it is legally permitted – enforcement patterns change, and what was tolerated previously may not be tolerated now.
I help buyers and sellers think through all income and use considerations for any property. If short-term rental potential is part of your evaluation criteria, let’s confirm what’s actually permitted before you make any commitments. Call me at (321) 447-4259 or visit movewithricky.com.
—
Rakesh (Ricky) Khanna | Licensed Real Estate Salesperson
Better Homes and Gardens Real Estate Realty Connect
Call or text: (321) 447-4259 | movewithricky.com
 |
 |
 |
 |
 |
