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NYC reverses Airbnb host's $2,400 fine

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Airbnb refuses to hand over data to the broad sweep of the Attorney General's demands.Airbnb

Airbnb says New York City has reversed a $2,400 fine for a man who rented out a room in his apartment through the vacation rentals site.

Nigel Warren was fined in May, when a New York judge said he violated a state law that prohibits short-term rentals. He and his landlord had appealed the ruling. This week the city's Environmental Control Board took their side, agreeing that short-term rentals are permitted as long as a permanent occupant is present. Warren was not in the apartment when the room was rented, but his roommate was.

New York City is one of Airbnb's largest markets, but its users face legal action because of a law that targets large companies that convert entire apartment buildings into illegal hotels. New York lawmakers insist they are not targeting individuals.

In May, Sen. Liz Krueger (D-N.Y.) said the problem is that companies like Airbnb and Flipkey, which use the share economy business model, aren't sufficiently educating their users of the consequences of their actions. Krueger sponsored the 2010 law that outlaws apartment rentals that are fewer than 30-days long in New York state.

"I am open to discussing good-faith efforts to improve our law, but the only proposals that have been put forward so far would gut the law, making it practically unenforceable and leaving New Yorkers without any recourse against illegal hotel operations compromising the safety and security of their homes." Krueger said in a statement.

In a blog post late Friday, Airbnb said the episode "highlights how complicated the New York law is." The San Francisco startup says it will continue to "work to clarify the law and ensure New Yorkers can share their homes" with travelers from around the world.

Airbnb operates in 192 countries and reports about 4 million stays have been booked through its service.