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New York City files suit against company accused of unlawful advertising of illegal short-term rentals

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A lawsuit was filed by the Mayor’s Office of Special Enforcement (OSE) against MetroButler for operating as a third-party property manager for hundreds of illegal rental units across New York City.

The company, which now runs under the name Makomi, is accused of its clients services ranging from booking and reservation management to laundry and stocking its units with MetroButler-branded bath and shower products like those found in traditional hotels. The company’s slogan stated “If you think of Airbnb as the world’s largest hotel, MetroButler is the front desk, concierge, and maid service all in one.”

The City’s suit accuses MetroButler of unlawful advertising, deceptive trade practices based on advertising short-term rentals without disclosing the illegal and hazardous nature of the rentals, and also illegal advertising and occupancy in multiple dwellings, and other violations. The City is seeking more than $3 million in damages, as well as an injunctive relief to prevent MetroButler from any further violations in New York City.

According to the lawsuit, between 2015 and 2019 MetroButler misled over 9,000 guests into booking illegal and unsafe rentals managed by the company, while Airbnb disbursed more than $3 million for reservations associated with MetroButler’s listings, with over $2.3 million worth of transactions listing MetroButler as a payout recipient.

“Once again, the online platforms where this activity occurred chose profit over corporate responsibility and looked the other way while MetroButler depleted New York City’s housing stock,” said Christian Klossner, Executive Director of the Office of Special Enforcement. “This case highlights the need for platform accountability so third-parties like MetroButler cannot funnel millions of dollars into their own bank accounts all while breaking the law.”

MetroButler offered services including property photography, the creation of online profiles and listings, bookings and reservations management, the handling of guest communication, cleanings, and supply restocking for the rentals, and operated as a broker between its clients and platforms like Airbnb and VRBO. The company would take 25-33% commission before releasing the remainder of the funds to its clients, and would charge additional fees for a range of services including $250 for creating custom listings on Airbnb and VRBO, $250 for custom host profiles, and $250 for reservation cancellations.

MetroButler is accused in the lawsuit of creating, advertising, and managing more than 300 Airbnb listings for illegal short-term rentals in at least 270 units in buildings across the City, through at least 264 unique Airbnb user accounts. During this time period, MetroButler allegedly completed over 4,000 illegal short-term rental reservations covering nearly 18,700 nights.

Today, MetroButler is offering courses and consulting services for clients looking to earn income from the short-term rental market and not directly managing any properties itself. The company collects a 10% commission on all revenue plus a $50 application fee, allowing the business to profit from the illegal short-term rental industry in New York City if any New York-based illegal operators sign up for their service.

“I’m extremely grateful to the Mayor’s Office of Special Enforcement for their action today against MetroButler, which acted as a third party property manager for hundreds of illegal hotel rooms operated by Airbnb,” said State Senator Brad Hoylman. “Illegal hotels threaten the safety and well-being of New Yorkers and visitors alike, as well as our city’s stock of affordable housing. The OSE lawsuit sends a strong message to illegal hotel operators and their accomplices that they’ll be held accountable for breaking our laws that ban short-term rentals.”

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