New York City's new short-term registration law is set to take effect on January 9, 2023, as the city takes one more swipe at the ever-growing short-term rental market. Companies like Airbnb and Vrbo, which operate platforms for short-term rentals, are calling this latest salvo of regulations "draconian," but the City is pressing ahead.

The regulations will require rental hosts in New York City to register with the city and prevent platforms from processing transactions unless their registration forms match the City's database.

This article will not focus on the registration requirements, the process for hosts and hosting platforms, or the penalties for non-compliance (which take effect on May 9, 2023). Rather, there is a very interesting opportunity for cooperatives and condominiums to completely prohibit short-term rentals in their buildings.

As part of the New York City registration process, the host applicant must certify that it is not prohibited by the terms of a lease or other agreement from applying for a short-term rental registration for the dwelling unit and from subsequently acting as host for short-term rentals within such dwelling unit. A co-op's proprietary lease and a condominium's By-Laws may not expressly prohibit tenant-shareholders/unit owners from applying for short-term rental registration status, a concept not likely to have been contemplated by these documents when originally drafted. However, adopting a simple amendment to the house rules prohibiting short-term rental registrations and short-term rentals may do the trick.

More favorably, the new requirements explicitly state that no short-term rental registration shall be issued or renewed for a dwelling unit in a building included on the prohibited buildings list.

The New York City Office of Special Enforcement (the "OSE") is now tasked with creating and maintaining a prohibited buildings list, which shall contain the address of each building whose owner, including any applicable board of a cooperative or condominium corporation, has notified the OSE that no short-term rental of any dwelling unit within the building is permitted.

To be added to such prohibited buildings list, a building owner, including any applicable board of a cooperative corporation or condominium, or the manager or agent of such building or board, must submit an online application to the administering agency. The applicant must provide:

1. the name of a natural person making the application;
2. a working phone number for the applicant;
3. an e-mail address for the applicant;
4. the address of the building the applicant seeks to add to the list;
5. an explanation of the relationship between the owner and the applicant; and
6. any proof or documentation requested by the OSE.

The applicant must certify that leases and other occupancy agreements for dwelling units within the building prohibit short-term rentals. The OSE will send a letter to the owner of record whenever it receives an application for inclusion on the prohibited buildings list.

The OSE will publish the list of prohibited buildings on the city's open data website. An application to remove a building from the prohibited buildings list may also be made by using an online application accessible from the OSE's website.