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Airbnb, the popular service that matches international travelers to rooms in private homes, and a tenant who posted a listing both suffered a setback after a judge ruled that the listings may violate the law in New York City.

The NYC market is a lucrative one for tenants who want to cash in on travelers looking for an alternative to high-priced hotel rooms.

As these private listings grew in number, lawmakers in New York City passed a “hotel” ordinance which prohibited most short-term rentals. One exception is where the tenant remains at the property while the guest is present.

Neighboring tenants and landlords alike have complained about the sub- rentals which allow frequent visitors into otherwise secure buildings within the city. Landlords run the risk of fines if their tenants violate the hotel law.

According to a news report, that’s what prompted the judge’s ruling. The tenant at the center of the dispute rented out his bedroom for three days while he was away on vacation. A roommate is said to have remained at the property. That notwithstanding, the landlord was fined for operating an illegal hotel.

To avoid eviction, the tenant agreed to assume the cost of the fines, according to the report. At the same time, the tenant fought the law. In the end, the court sided with the city.

In April, Airbnb announced it was tightening its vetting procedures by launching “Verified Identification”, a system where its existing online ID check is matched with offline criteria.

According to the report, Airbnb has also run into problems in Amsterdam, where officials have investigated whether listings violate local laws.

Many tenants have expressed surprise over how easily their listings have been identified by investigators, and a few say they will turn to Craigslist or other online avenues to market space in their rental units.

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