NY Appellate Court Affirms Civil Penalty of $1,000 Per Day For 39 Days for Unlawful Short Term Rental Conversion

This post was authored by Amy Lavine, Esq.

The petitioner in Matter of 147-25 N. Assoc., LLC v. New York City Off. of Trials & Hearings, 220 A.D.3d 684 (2d Dept 10/4/23), was the owner of a multiple dwelling in Queens, New York and was issued a summons by the Department of Buildings for allegedly converting dwelling units in the building that were classified as permanent residences into short-term rentals in violation of the city’s administrative code. Following a hearing held before the New York City Office of Administrative Trials and Hearings, the charges were sustained and the petitioner was directed to pay a civil penalty of $1,000 per day for a period of 39 days from November 9, 2019 to December 17, 2019, which was the time period between the date when the summons was issued and the date when the violation was supposedly corrected. The petitioner filed an administrative appeal regarding the amount of the penalty, arguing that the violation was cured almost immediately and that it should only be liable for daily penalties for two days. The Office of Administrative Trials and Hearings rejected the petitioner’s administrative appeal, relying on the sworn certificate of correction filed by the petitioner, which stated that December 17, 2019 was the date that the violation was corrected. This appeal followed.

The Appellate Division, Second Department affirmed the penalty determination on appeal. As the court explained, the “determination directing the petitioner to pay a civil penalty of $1,000 per day for a period of 39 days… was supported by substantial evidence, including the sworn statement by the petitioner’s owner in the certificate of correction identifying December 17, 2019, as the date the violation was corrected. Further, as judicial review of administrative determinations is confined to the facts and record adduced before the agency, the petitioner’s reliance upon evidence that it did not introduce at the hearing is improper.”

Matter of 147-25 N. Assoc., LLC v. New York City Off. of Trials & Hearings, 220 A.D.3d 684 (2d Dept 10/4/23)