Ask an Expert

Can I rent out bedrooms in my NYC townhouse to help pay my mortgage?

By Alanna Schubach  | April 12, 2021 - 2:30PM

It is not legal to divide an existing dwelling unit into separate living spaces without first obtaining DOB work permits.


Are there any rules that would prevent me from renting out multiple bedrooms in my New York City townhouse to help pay the mortgage? And if I do rent out rooms, what do I need to do to protect myself?

There are legal restrictions against renting out individual rooms in your house, our experts say, but as the owner of a single-family home, you are legally permitted to take roommates, which means that anyone who comes to live in your townhouse has access not only to their own bedroom, but also to any common areas in the house. 

"New York City allows members of the public to have roommates in both single-family homes and in apartments, provided that these roommates maintain what is known as a 'common household,' meaning they share the livable space of the dwelling unit," says Andrew Rudansky, press secretary at the Department of Buildings.

Under the NYC Administrative Code, no more than three unrelated roommates can occupy a dwelling unit and maintain a common household, which means you can take on one or two roommates. 

But you can't rent out single rooms. "It is not legal to divide an existing dwelling unit into separated living spaces, thereby creating new dwelling units, without first obtaining DOB work permits," Rudansky says. That would be an illegal conversion and can result in violations and other enforcement actions. 

"If someone were to rent out part of an existing dwelling unit in a way where members have limited rights to use the common spaces and don’t have access to the other rooms—for example using external locks to separate the home into different areas—that would constitute an illegal conversion," he says.

Note that New Yorkers living in buildings occupied by three or more families living independently of each other are also legally prohibited from renting out individual rooms in their apartments; see this Ask Sam column for more information.

You should also take care not to run afoul of NYC's laws for short-term rentals: If you plan to rent out rooms in your home for less than 30 days at a time, you are legally required to change the property's Certificate of Occupancy to that of a rooming house. 

If you decide to take on roommates to help offset your mortgage, you would be advised to draw up an agreement and determine what your roommates would pay in rent. (This rental income must be reported on your taxes.) Your roommates wouldn't have a claim on your property as long as your name is on the townhouse's title and mortgage. But even with a signed agreement in place, you could run into major problems if your roommates stopped paying rent. 

"The person who owns the townhouse could find themselves in a situation where the roommate stops paying rent and refuses to leave, and the owner would have to bring a case to courts and it would take quite a while," says David Skaller, a partner with Belkin Burden Goldman. "The courts are moving so slowly, and you'll be on line with people who have been sitting in the queue since last May. So that's a risk the owner needs to weigh, because these things can go south."

You will also need to update your insurance policy. 

"You can void your insurance by renting out rooms, especially on a short-term basis," says Jeffrey Schneider of Gotham Brokerage (a Brick sponsor). "You should contact your insurer for details. At a minimum, insist that your tenants have coverage." 

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Alanna Schubach

Contributing writer

Contributing editor Alanna Schubach has over a decade of experience as a New York City-based freelance journalist.

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