News

Office of Special Enforcement Sues to Hold LuxUrban Liable for Illegal Short-Term Rental Scheme

City takes legal action to enforce $1.2 million judgement
Action exposes company’s attempt to dodge accountability after rebranding name
Enforcement advances city's commitment to protecting housing and affordability

NEW YORK — The Office of Special Enforcement (OSE) today filed suit against short-term rental operator LuxUrban Hotels, Inc. to recover a $1.2 million default judgment tied to its predecessor CorpHousing Group and its brand SoBeNY, both of which previously operated illegal short-term rentals in New York City. The lawsuit underscores the city's commitment to holding bad actors accountable and protecting the availability of housing for New Yorkers.

The city filed its successor liability suit after LuxUrban refused to pay a settlement the company itself acknowledged it would cover, including bouncing its initial installment of the penalty. CorpHousing originally agreed to the settlement in 2023 to resolve years of illegal short-term rental activity that violated city laws. When LuxUrban later rebranded from CorpHousing, it requested to remove its name from the settlement to protect its corporate brand – even though they retained the same leadership, address, and business model.

“As New York City’s housing market faces a 1.4 percent vacancy rate, illegal short-term rentals rob New Yorkers of available housing options and undermine our hospitality sector,” said New York City Mayor Eric Adams. “We will not allow bad actors to operate in our city, especially those who attempt to subvert the law and avoid accountability by hiding their identity and refusing to pay their settlements. Today, we are sending a clear message that New York City must be a safe and affordable place to raise a family, and this kind of lawlessness will not be tolerated.”

“The city accepted an offer of $1.2 million to address past illegal short-term rentals and gave the company that is now LuxUrban the chance to move forward as a legal hotel room provider in NYC,” said OSE Executive Director Christian Klossner. “By this action, the city serves notice that it will not allow LuxUrban to shirk its agreed upon responsibility, and that it must pay its debt to the taxpayers of New York City.”

The settlement was originally to be paid in several installments, but when CorpHousing’s first installment check bounced and no response was provided to the City’s demand for an explanation, the city obtained a court order accelerating the full amount owed as agreed upon in the settlement. LuxUrban, which publicly acknowledged the debt in 2024 SEC filings and told the city it would pay the settlement, has since refused to cooperate despite multiple collection attempts. Today’s lawsuit seeks to hold LuxUrban liable as CorpHousing’s corporate successor, to prevent companies from avoiding accountability through rebranding.

New York City’s short-term rental laws, enforced by OSE, protect permanent housing and the residents and guests of the city. To conduct rentals for fewer than 30 days in most residential units of housing, hosts must now register with the city and comply with all applicable housing, building, and zoning regulations.

To learn more about Local Law 18, known as New York City’s Short-Term Rental Registration Law, click here.

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About the Mayor's Office of Special Enforcement
The Mayor's Office of Special Enforcement, positioned within the Mayor's Office of Criminal Justice (MOCJ), is an innovative, solutions-oriented task force that ensures communities are safe from harmful, illegal, and unregulated industries that one agency and one set of enforcement tools alone can't address. OSE’s multi-agency enforcement team devises strategic solutions to complex problems and is responsible for both the enforcement of laws and regulations on short-term residential rentals and the education of the public on these laws. For more information, visit nyc.gov/ose.