The Town of East Hampton has issued a Montauk property owner 57 tickets for violating the town’s rental registry law.
The town reported in a press release last week that the tickets, issued to Harvey Elgart and 64 S. Elroy LLC, are the result of a three-month joint investigation conducted by the town attorney’s office and the Ordinance Enforcement Department. Through a subpoena issued to Airbnb, the town found that the house and other structures at 64 South Elroy Drive were rented out more than 55 times between May 2021 and early this year, with more than $100,000 in rent collected.
Under the town code governing short-term rentals, within a six-month period a home may only be rented out for a period of less than two weeks twice. Rental properties must also be registered with the town Building Department, and the rental registration number must be included in any advertising of the rental.
If found guilty, Elgart and 64 S. Elroy LLC could face more than $200,000 in fines, according to the town, which said a “period of incarceration” is also possible. The arraignment is scheduled for August 1 in East Hampton Town Justice Court.
“Our East Hampton Town codes are designed to protect property owners and residents from the impacts resulting from the misuse of residential properties, such as turning a residence into a money-making, commercial venture,” East Hampton Town Supervisor Peter Van Scoyoc said in a press release last Thursday, June 30. “The transformation of single-family houses into heavy turnover rentals advertised on Airbnb and other sites has had a noticeable negative impact on the character of our neighborhoods and community. The Town will continue to pursue legal action against those who disregard our regulations and community values.”
Larry Kelly, the attorney representing Elgart, sees a number of problems with the town’s case related to the rental registration law itself and the town’s authority to issue a subpoena.
According to Kelly, the town attorney’s office may only subpoena records from businesses located within the town and only if there is an ongoing criminal proceeding in East Hampton Town Justice Court. He noted that Airbnb is headquartered in San Francisco and that a subpoena was issued before any criminal proceeding had began.
“My client, Harvey Elgart, had records with this third-party company, Airbnb, that included banking records,” Kelly said on Tuesday. “So those are confidential private records under California statute and the California constitution.”
He also noted that his client was not given notice that the subpoena was issued nor an opportunity to contest the subpoena, and he said that a California court needed to OK a subpoena from New York, which did not happen.
“Their press release indicates that the town is culpable for an abuse of process — because the subpoena process has been abused — and fraud because they know they can’t get the records this way legally, and yet they went ahead and did it,” Kelly said. “So that press release damns them by their own words.”
He said evidence obtained illegally by a prosecutor in the State of New York should be suppressed. “It’s what’s called ‘fruit of the poisonous tree.’ You can’t use any of the fruit from that illegal search,” he said.
Regarding whether 64 South Elroy Drive was rented out illegally, Kelly said it was not, because it was a rental cottage on the Pitts fishing lodge compound that predated zoning and because the town’s rental registry law applied to single-family and two-family houses — but not cottages.
“This, in fact, doesn’t change the neighborhood,” he said. “This has been going on for 70 years here.”
