Two former hosts of Airbnb filed a complaint against the company being an illegal business, recent reports say.
The lawsuit was filed last Friday, Feb. 12 by couple Francesco Plazza and Sylvie Naude. Naude, who owns Indigo House, a Midtown-based firm, reveals as per The Real Deal that Airbnb is a non-certified real estate broker, asserting that the fees being collected by those who arrange rentals through their company are against the law.
"What may seem a novel and convenient enterprise is, at bottom, entirely illegal," a statement in the complaint reads.
According to The Real Deal, Airbnb collects fees for every rental transactions they facilitate which is equal to 6-12 percent of the rental charge. Such transaction is in violation of Sec. 440 of New York Real Property Law (NYRPL) as well as Sec. 349 of New York General Business Law. Business Wire verified that the lawsuit is dubbed Plazza v. Airbnb, Inc., 16-cv-01085.
In view of this, the couple's lawyers, Jeffrey Norton of Newman Ferrara LLP and Lucas Ferrara are currently taking action on this recent complaint by the former hosts.
"Airbnb's business model falls squarely within New York real estate broker licensing requirements. There are very limited exceptions to this law and Airbnb does not qualify," Norton said.
The source says these lawyers are pursuing to have Airbnb pay for the damages tantamount to the charges the company collected from the hosts and guests for the past six years, including the 400 percent penalty charged for the fees collected from the former employees and the punitive damages as well. The suit further explains that these damages are applicable to all Airbnb users.
Meanwhile, Airbnb denied the allegations. "The claims in this lawsuit have no merit and we are confident that the case will be dismissed," said an Airbnb spokesperson.
Earlier this week, independent data analysts Murray Cox and Tom Slee released a report asserting that Airbnb had purged over 1,000 controversial listings from its site just prior to its much-hyped release of New York City user data late last year.
On the other side, a hospitality research firm released a report saying no solid evidence is found to intensify the allegations against Airbnb, as per TRD.