LuxUrban Hotels sued for $1.5 million over alleged lease violations

United States: based in Miami short-term rental operator LuxUrban Hotels is reportedly facing multiple lawsuits in New York for allegedly breaching leases and unpaid rent, which amount to more than $1 million.

It is alleged that LuxUrban Hotels, which changed its name from CorpHousing Group last month after IPO via $13.5 million initial public offering [IPO] in Augustand CEO Brian Ferdinand, owe approximately $1.5 million in unpaid rent and other expenses for 20 units allegedly leased by the company in Manhattan and north Brooklyn.

Affiliates of apartment owner Black Spruce Management are believed to be among the plaintiffs seeking payments from LuxUrban Hotels.

Founded in 2017, LuxUrban Hotels uses a long-term rental and asset-light business model to acquire and manage a growing portfolio of short-term rental properties in major metropolitan cities. The company, which trades publicly on the Nasdaq as LUXH, says its future growth is primarily focused on finding “win-win” opportunities for dislocated hotel owners, including those who have been affected by Covid-19 travel restrictions.

The allegations focus on LuxUrban hotels supposedly renting units in its buildings at the start of the pandemic before failing to pay rent and leaving the units before the leases ended. Additionally, a Little Italy landlord is alleged to have faced nearly $53,000 in fines after LuxUrban Hotels was accused of subletting one of its units to another occupant for a period of time. of less than 30 days, thus violating both the lease and the New York City Short Term. term rental law

Each of the landlords accuses LuxUrban of essentially the same thing: renting accommodation in their buildings in the first months of the pandemic, then almost immediately not paying the rent. After breaching the leases, according to the complaints, LuxUrban would end up leaving the accommodations before the leases expired.

Ferdinand was the guarantor for five of the leases, but never repaid the unpaid rents and fees incurred by the landlords, according to the complaints.

At 185 Hester Street in Little Italy, the company allegedly fined its landlord nearly $53,000 after subletting the space to another occupant for less than a month, both breaching the lease and the city’s Short-Term Rental Act, which prohibits renting an entire apartment or home for less than 30 days.

In response, LuxUrban Hotels called the accusations “baseless” and said the owners entered into a surrender and release agreement when the company entered into a joint venture with Black Spruce Management and co-owner Josh Gotlib. The company has denied the allegations and said it plans to file a countersuit to quash the lawsuits.

STRz approached LuxUrban Hotels to comment on the matter.

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