Opinion 22-63/22-74(A)/22-87

 

May 5, 2022

 

Digest:         (1) A full-time judge who owns and rents real property must report this rental income under Section 100.4(H)(2) if the judge nets more than $150 in a calendar year from it. (2) Where the judge rents the property through Airbnb, the judge may report the name of the payor as “Airbnb.”
(3) Where the judge rents residential real estate within the State of New York to an individual tenant, the judge may report the place of the activity as “State of New York” and identify the payor tenant by first initial and last name.

 

Rules:          22 NYCRR 100.2; 100.2(A); 100.4(D)(2)-(3); 100.4(H)(1); 100.4(H)(2); Opinions 22-87; 22-74(A); 22-63; 21-98; 20-102; 16-37; 15-182.

 

Opinion:

 Three full-time judges who own real property ask about their reporting obligations under Section 100.4(H)(2) when they rent this property to others, either directly or through a third-party commercial entity such as Airbnb.1

 

         A judge must always avoid even the appearance of impropriety (see 22 NYCRR 100.2) and must always act to promote public confidence in the judiciary’s integrity and impartiality (see 22 NYCRR 100.2[A]). A full-time judge may receive compensation for permissible extra-judicial activities if it “does not give the appearance of influencing the judge’s performance of judicial duties or otherwise give the appearance of impropriety” (22 NYCRR 100.4[H][1]). Although a full-time judge is generally prohibited from serving as “an officer, director, manager, general partner, advisor, employee or other active participant of any business entity” (22 NYCRR 100.4[D][3]), they may nonetheless “hold and manage investments of the judge and members of the judge’s family, including real estate” (22 NYCRR 100.4[D][2]). Finally, and at the core of the inquiries here, Section 100.4(H)(2) states:

 

A full-time judge shall report the date, place and nature of any activity for which the judge received compensation in excess of $150, and the name of the payor and the amount of compensation so received. ... The judge’s report shall be made at least annually and shall be filed as a public document in the office of the clerk of the court on which the judge serves or other office designated by law.

 

1. Must a Full-Time Judge Report Rental Income Over $150?

 

In the first inquiry (22-63), the judge and their spouse jointly own real estate and rent it out for short-term stays on Airbnb, with the judge’s spouse identified as the sole “host.” This judge asks if the resulting rental income must be reported under Section 100.4(H)(2). In the second inquiry (22-74[A]), the judge owns and rents out a guest house on the same parcel of land as the judge’s residence, and likewise asks if this rental income must be reported under Section 100.4(H)(2). In the third inquiry (22-87), the judge owns and rents certain real property to a residential tenant with small children on the premises.

 

         The threshold question for all three inquiries is whether rental income is “compensation” for an extra-judicial “activity” under Section 100.4(H)(2). We conclude that it is. We have said a full-time judge must make a report to the clerk of the court when the judge earns more than $150 for extra-judicial activities such as licensing a patent to another (see Opinion 20-102) or writing and publishing a book (see Opinion 15-182 & fn 1) or writing and optioning a screenplay (see Opinion 16-37).

 

         Moreover, in Opinion 21-98, when considering whether the inquiring judge had to report rental income from two money-losing properties under Section 100.4(H)(2), we recognized that “both financial transactions result from permissible extra-judicial activities” that would be subject to reporting if they exceeded the $150 threshold. On the specific facts presented, however, we concluded reporting was not required because “it does not appear the judge has received compensation exceeding the $150 threshold” (id.).

 

         We likewise conclude that renting out real estate owned by the judge is an extra-judicial activity, and thus the compensation received for this activity is subject to reporting if the judge nets more than $150 in a calendar year from it.

 

 

2. Reporting the “Name of the Payor” and the “Place ... of [the] Activity”

 

         In the first inquiry (22-63), the judge and their spouse rent out certain real estate for short-term stays on Airbnb. The judge explains that Airbnb is an “online marketplace” that connects property owner “hosts” with potential renter “guests.” When hosts accept a rental request, “Airbnb collects the rental fees, any other fees charged and applicable occupancy taxes” and makes available the guest’s “full identity (as disclosed to Airbnb).” Then, “[a]fter the rental has commenced, Airbnb remits to [the hosts] the nightly rental fees and other fees charged, minus a three percent host service fee.” The judge asks if it is sufficient to “disclose Airbnb as the payor of the rental income since they collected and remitted the rental income” under Section 100.4(H)(2), or whether the judge must instead “disclose the identity of each and every guest who rented” the property in a calendar year.2

 

         While we have not previously addressed this issue, we assume that a judge who publishes a book would ordinarily report the publisher as “payor” rather than attempting to track and identify individual purchasers. In light of Airbnb’s described role as intermediary and payor in the judge’s rental process, we conclude it is sufficient to report Airbnb as the “payor.”

 

         In the third inquiry (22-87), the judge presides in a court where litigants sometimes threaten the judge’s personal safety. This judge asks if it is ethically permissible to protect a residential tenant’s safety and privacy by reporting that the activity took place in the “State of New York” rather than providing the residential property’s street address, and by reporting only the tenant’s first initial and last name as the “payor” rather than providing the tenant’s full name.

 

         In the absence of any administrative directive to the contrary, we conclude that a full-time judge who reports rental income from renting residential real estate to individual tenants under Section 100.4(H)(2) is not ethically required to disclose the street address of the property. If the residential property is located within the State of New York, it is sufficient to report the “place” of the activity as “State of New York.” The judge may also, in their sole discretion, choose to report the “name of the payor” by providing the residential tenant’s first initial and last name rather than the tenant’s full name. We note that this approach is similar to a traditional white pages telephone directory entry.

 

         We cannot comment on any legal questions, such as whether residential tenants have a right to privacy that may be implicated by disclosure of their name and address or other information under Section 100.4(H)(2). We likewise decline to comment on the judge’s alternative proposal to provide the tenant’s full name to the office of court administration and file only a redacted version with the court clerk, as this seems to raise primarily administrative issues and is moreover rendered moot by our conclusions above.

 

 

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1 We do not comment on a judge’s obligations under the financial reporting rules of 22 NYCRR part 40, as they are not part of the Rules Governing Judicial Conduct. Questions about interpreting a judge’s financial disclosure obligations under Part 40 should be addressed to the UCS Ethics Commission, which provides detailed forms and instructions as well as procedural guidelines and contact information on its website (http://ww2.nycourts.gov/IP/ethics/index.shtml).

 

2 The judge states that, in the prior calendar year, “Airbnb paid out rental in excess of $150.00 for each and every rental to the joint checking account shared by” the judge and their spouse.