New York Airbnb’s Licensing Status Challenged

Airbnb tells its millions of users that it is neither a real-estate broker nor agent. But New York’s Department of State has launched an investigation to see if Airbnb Inc.’s short-term rental business should be licensed as a real-estate brokerage business under New York state law.

The state disclosed the investigation as two Airbnb hosts filed a lawsuit Thursday saying that Airbnb defrauded its hosts and guests who rent rooms and apartments in New York by doing business without a required real-estate license.

The suit, which seeks class-action status, asks for a penalty under state law of four times the service fees that Airbnb received in connection with hundreds of thousands of rentals over the past six years, as well as other damages.

Attorney Lucas Ferrara, who filed the suit, said the company’s employees process “lease” forms, collect “rent,” mediate disputes and act “as a broker would in comparable circumstances.”

Airbnb portrays itself as an “online platform that connects hosts” with guests looking for a place to stay, more akin to classified ads than a brokerage service.

An Airbnb spokesman said the lawsuit was without merit.