From DNA Info:
East Village renters using AirBnB, the apartment-sharing website popular worldwide, did not violate city hotel regulations, an administrative law panel ruled Thursday.
The case involving a tenant who sublet his room in a two-bedroom apartment on East Second Street last September, was widely seen as a test case in the city for the relatively new form of apartment sharing.
The decision reverses an earlier ruling that found Abe Carrey, the owner of the apartment, was in conflict with the city code governing transient hotels because his tenant rented out his room to a Russian tourist for three nights using the online site.
The Department of Buildings originally fined Carrey $40,000 for breaking the hotel regulations, as well as series of safety violations required for a licensed transient hotel. At the time of Thursday's decision only a $2,400 fine remained, which was nullified by the ruling.