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DC Attorney General Settles City Apartel Suit

by Nena Perry-Brown

In 2017, Ginosi USA Corporation became one of the more recognizable names when it came to the practice of subletting short-term rentals out of DC apartment buildings, compelling a lawsuit from the city, inspiring an early version of DC's Airbnb regulation bill, and bringing the term "apartel" into the public consciousness.

Now, the Office of the Attorney General (OAG) has settled that suit.

On Friday, OAG announced that Ginosi has been barred from operating apartels (hotel use of apartment units) in the city. The settlement requires Ginosi to pay more than $782,900 to the District, and the company can no longer do any residential business in the city. Also, for the next ten years, the company must give the OAG a 60-day notice before conducting any other consumer-related business in DC.

Prior to the lawsuit, the company had been operating at least 70 unlicensed apartels out of rent-controlled buildings in Wards 2 and 6. The lawsuit characterized Ginosi's apartels as a violation of DC's consumer protection laws, noting that the company also used deceptive pricing practices. This is not the first settlement reached in relation to Ginosi's apartel operation, with a previous settlement resulting in restitution to affected tenants of apartel buildings.

“Ginosi violated District law by unlawfully converting building units that were intended to be available for long-term renters into short-term hotel-like units,” AG Karl Racine said in a statement. “The District’s affordable housing crisis is squeezing our residents, and illegal schemes like Ginosi’s heighten the problem.” 

Since 2017's apartel outcry (and other apartment buildings coming under fire for unsanctioned short-term rentals), other businesses have found success in the District operating short-term rentals out of residential buildings.

This article originally published at http://dc.urbanturf.com/articles/blog/office-of-the-attorney-general-settles-ginosi-apartel-suit/16098

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