A $21 million lawsuit filed in New York alleges that a sophisticated web of real estate brokers used Airbnb illegally to trick 75,000 unknowing guests

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  • A $21 million lawsuit is accusing a web of real estate brokers of using Airbnb to illegally rent over 250 listings to nearly 76,000 unknowing guests.
  • The lawsuit, filed in New York City on Jan. 14, accuses Metropolitan Property Group, a real estate brokerage firm, of using a litany of fake identities to rent out 130 former apartment listings, which were converted from permanent residences to accommodate travelers - including a whole entire building in East Harlem.
  • New York City is Airbnb's largest market in the US, with over 50,000 listings. It is illegal to rent out an apartment for fewer than 30 days in some buildings unless the permanent resident is present.

A $21 million lawsuit filed in New York City is accusing a prominent real estate brokerage firm of using a sophisticated litany of fake identities in order to transform 130 apartment listings into traveler accommodated suites - including an entire building in East Harlem - featured on Airbnb.

The lawsuit, the largest of its kind being brought by the city, lists Metropolitan Property Group as its primary defendant. The group is accused of illegally advertising 250 short-term rentals via 101 host accounts to nearly 76,000 unknowing guests.

"[...] Almost 13,700 illegal short-term rental reservations took place, generating a total of approximately $21 million in revenue from 2015 to 2018," the lawsuit said about listings associated with MPG.

In New York, it is illegal to rent out apartments, in most buildings, for less than 30-days unless the primary tenant is present. Airbnb said commercial operators, such as those detailed in the lawsuit, are not common on its site via a statement made to The New York Times.

Though, many Airbnb users may already be aware of the sophisticated web of real estate brokers on the platform. Some listings in any one building can look remarkably the same, in terms of decor and descriptive language, and feature the same host. Some listings in New York City even include instructions to guests to not disclose they are staying in an Airbnb to neighbors.

The Mayor's Office of Special Enforcement, which enforces short-term listings on sites such as Airbnb and HomeAway, found one phone number associated with at least 19 different Airbnb host accounts, linking several defendants listed in the lawsuit.

And though the lawsuit does not list Airbnb as a defendant, it marks a significant win for skeptics who have been outspoken about the platform and how some utilize it. A spokesperson for Airbnb was not immediately available to comment.

New York City is Airbnb's largest market in the US, with over 50,000 listings.

The lawsuit comes less than two weeks after a federal judge blocked a New York City law from taking effect that would require Airbnb to hand over data each month about people who use its apartment listing service. The law was passed last July and was scheduled to go into effect next month.

Airbnb was last valued at $31 billion in 2017 and has said it plans to go public in mid-2019.

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