Gale Brewer Presents Case Against airBNB to Bill de Blasio

We heart Gale Brewer. Everybody knows that.

As presented on the Manhattan Borough President’s website on June 6, 2014, Gale Brewer championed the rights and safety of ethical residential tenants and described the perils of illegal short-term rentals in a letter written to Bill de Blasio relative to the airBNB lobby proposal:

Hon. Bill de Blasio
Mayor
City Hall
New York, New York 10007

Dear Mayor de Blasio:

I write to express my concern about the ever-growing presence and efforts of the illegal hotel industry. This multi-million dollar business flouts our state and city laws and regulations and creates fire and safety hazards in thousands of residential buildings. I am asking that you oppose the illegal hotel industry’s legislation to gut the protections of New York City residents and the industry’s efforts to collect taxes on illegal activity.

As you are well aware, over the past few years, alongside tenants, advocates, my fellow electeds and City agencies, I have fought this industry in the courts as well as through legislation and enforcement efforts. I understand that members of this industry, specifically Airbnb – now valued at $10 billion – have relaunched their efforts to roll back the protective statutes. Specifically, it seeks to repeal the 2010 legislation which clarified the definition of “permanent residence”. Bills have already been introduced in Albany (A07848/S05039, A5637/S5637, and S5433) seeking to legalize the now illegal use of apartments, including affordable, rent-regulated apartments for commercial hotel use.

In the face of the State Attorney General’s intense investigation and subpoena of their records, Airbnb has recently revealed another strategy: to begin collecting hotel taxes on the transient use of residential apartments. They claim that this revenue will be sufficient to fund the Administration’s plans for the creation of new affordable housing.

The Administration must not jettison the tenant protections embodied in the current laws and regulations or accept payment on illegal activity that violates tenants’ rights. They represent not only important health and safety protections, but the recognition that residential living is qualitatively different from hotel living. In our city of apartment-dwellers “one man’s ceiling is another man’s floor,” and we share our lobbies, hallways and elevators with our neighbors. Hotel occupancy, where public areas of a building are in fact “public” and populated by transient strangers, is a very different way of living. New Yorkers who have chosen, and by their leases contracted, to live in residential buildings have the right to quiet enjoyment of that condition, and the protection of the laws that define such housing.

In addition to the dangers and nuisances posed by Airbnb’s business model, the illegal hotel industry keeps substantial numbers of affordable housing units off the market. Many tenants, seeking additional income, avail themselves of Airbnb’s services and put themselves at risk of eviction.

I look forward to hearing from your office soon.

Sincerely,

Gale A. Brewer

Procuring Insurance Is Not Equal To Indemnification

In the matter of Verduzco-Soto v. Georgia Properties Inc., a scaffold worker fell while descending from a scaffold, suffering personal injuries while working on the exterior of 275 Central Park West. He was working for Viles Contracting Corp, the contractor hired by Georgia Properties, the building owner.

Viles obtained insurance covering Georgia Properties pursuant to the “Standard Form of Agreement Between Owner and Contractor”, which does not include a clause requiring Viles to indemnify Georgia Properties.

Meanwhile, there was a subsequent “Hold Harmless” agreement, which contains an Indemnification clause between Viles as “Contractor” and RCR Management LLC and Affiliates as “Owner/Landlord.” Ari Paul, the RCR Management LLC managing agent, testified that: RCR was the property manager for the Building on the date of the alleged accident; neither he nor RCR had any relation to Georgia Properties; he did not report to Georgia Properties regarding the construction at issue; and he did not report to Georgia Properties in his capacity as managing agent of the Building.

Georgia Properties was cross-moving for summary judgment on the grounds that it is—or was intended to be—covered by the “Hold Harmless” Agreement between Viles Contracting Corp. and RCR Management LLC and its Affiliates, and lists this latter entity as the “Owner/Landlord.”

The Court concluded there was no evidence that Georgia Properties was an RCR Management LLC affiliate. Further, the President of RCR Management LLC testified that there was no relationship between Georgia Properties and RCR Management LLC, and that he had no responsibility to report to Georgia Properties regarding the construction being done by Viles or his management of the Building.

The Court was unmoved by Georgia Properties’ argument that Vile’s procurement of insurance coverage equates to an intention to indemnify, since an agreement to procure insurance is not an agreement to indemnify or hold harmless, and the distinction between the two is well recognized. So, Georgia Properties’ cross-motion was denied by the Court.

Ari Paul signs leases and renewals as “Owner” for 275 Central Park West and other properties held in trust for various beneficiaries (including Richard Eisenberg). RCR Management LLC and Georgia Properties (along with another 19 building corporations) list 155 Riverside Drive as their official address, according to the NY Department of State, Division of Corporations online database.

Perhaps the Court decision would have been different had any relationship between RCR Management LLC and Georgia Properties been elucidated.

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