D.C. has banned California-based company Ginosi from selling dozens of illegal short-term rentals in residential apartment buildings, forcing the company to pay more than $782,000 in unpaid taxes and civil penalties.
D.C. Attorney General Karl A. Racine said the Ginosi USA Corporation violated District law by converting building units intended for long-term renters into hotel-like units.
In a statement announcing the move, Racine accused Ginosi of exacerbating the city’s affordable housing crisis and failing to pay sales taxes collected from guests.
The settlement resulted from a 2017 lawsuit involving 70 apartment units unlawfully marketed as hotel-like accommodations, violating D.C. housing and consumer protection code preventing long-term rental units from being converted into short-term transient rentals.
The units were located mainly in rent-controlled buildings throughout wards 2 and 6.
As part of an order resolving the litigation, the Office of the Attorney General said Ginosi will be required to terminate rental operations in D.C., provide 60 days of notice before engaging in any business with D.C. consumers and pay over $682,000 in owed sales taxes plus with interest.
Ginosi must also pay the District government upwards of $100,000 in additional civil penalties.
Headquartered in Armenia, Ginosi describes itself as a “fast-growing international hospitality chain” operating hotel rooms and furnished apartments throughout the U.S. and Europe. The company’s U.S. arm is located in Los Angeles.