Public consultation on review of Hotel and Guesthouse Accommodation Ordinance begins (with photos)
******************************************************

     The Home Affairs Department (HAD) today (July 4) released a consultation paper on the "Review of the Hotel and Guesthouse Accommodation Ordinance" to consult the public on facilitating enforcement actions against unlicensed guesthouses and enhancing the licensing regime.

     At today's press conference, the Secretary for Home Affairs, Mr Tsang Tak-sing, said that given the unique circumstances of Hong Kong, many guesthouses are operating in multi-storey buildings. In recent years, there has been increasing concern about guesthouse operations. First, unlicensed guesthouses pose an imminent threat to public safety and stepped-up enforcement actions should be taken. Second, guesthouses in multi-storey buildings cause a nuisance to other residents.

     The operation of hotels and guesthouses in Hong Kong is regulated by the Hotel and Guesthouse Accommodation Ordinance (Cap 349) (the Ordinance). It aims to, through a licensing regime, ensure that premises intended to be used as hotels or guesthouses meet the building structure and fire safety standards specified in the Buildings Ordinance (Cap 123) (BO) and the Fire Services Ordinance (Cap 95) (FSO) to safeguard lodgers and the public.

     The Office of the Licensing Authority (OLA) under the HAD is delegated by the Hotel and Guesthouse Accommodation Authority (the Authority) for implementing the Ordinance, including issuing licences and performing relevant regulatory and enforcement duties.

     Mr Tsang said, "The HAD has recently conducted a comprehensive review on the implementation of the Ordinance and related enforcement actions. A consultation document containing proposals to amend the Ordinance was issued today to kick-start the territory-wide consulatation. Setting out various proposals, the consultation document aims to enhance the effectiveness of enforcement action against unlicensed guesthouses to offer better protection to the public, and improve the licensing regime to minimise the impacts caused by guesthouses to residents."

     On enforcement, the OLA has all along spared no effort to combat unlicensed guesthouses. Last year, the OLA conducted nearly 10,000 enforcement raids, triple the figure in 2011, while the respective numbers of prosecution and conviction also increased two to three times. Despite continuous efforts on the part of the OLA, unlicensed guesthouses can never be completely eradicated considering the high profit.

     The Director of Home Affairs, Mrs Pamela Tan, said that the safety of unlicensed guesthouses is in question for they may not meet the basic building and fire safety standards and have staff on-duty at night to secure the safety of the lodgers. Residents in the same building and the public may face the risk of serious consequences in case of fire incidents and thus no unlicensed guesthouse shall be spared.

     She said, "To enhance the effectiveness of enforcement action, we propose to amend the Ordinance to the effect that any premises shall be deemed to be operated as an unlicensed guesthouse once the OLA has collected sufficient circumstantial evidence, such as advertisement, price list and guesthouse layout, as well as items normally provided by guesthouses (e.g. towels). The property owner and tenant of the premises shall also be deemed to be the operator of the guesthouse. These deeming provisions shall effectively facilitate enforcement actions against operators of unlicensed guesthouses who are not caught red-handed. Nevertheless, these deeming provisions will not be applicable if the contrary is proved by the concerned parties.

     "We also propose to allow the OLA's officers to apply to the court for warrants when necessary, which will empower them to enter into individual premises for inspection and enforcement actions according to the court's order," she added.

     Operating unlicensed guesthouses poses a high risk to the life and property of the lodgers and the public. To give a clear message to the community and enhance the deterrent effect, the consultation paper proposes to increase the maximum fines for operating unlicensed guesthouses from $200,000 to $500,000 and imprisonment from two years to three years. It is also suggested to empower the OLA to apply to the court, upon the second conviction of an unlicensed guesthouse, to issue a Closure Order against the relevant premises for six months.

     Mrs Tan said, "A Closure Order is a penalty with a clear deterrent effect. As the owners will suffer from great financial loss, they may be urged to give up their plans to operate unlicensed guesthouses, and take action against their tenants who use their premises for such purposes and to a greater extent, cease their lease."

     Safety is the main target of the Government's regulation of hotel and guesthouse operations. The current licensing regime has been able to ensure that the safety standards specified in the BO and the FSO are met in the licensed hotels and guesthouses. Mrs Tan said, to offer better protection to the lodgers and residents in the buildings, new requirements on licence applications are proposed in the consultation paper. They include requiring the applicant of the guesthouse licence to be "fit and proper" (for example, not having been convicted of an offence against any provision of the Ordinance and other offences), and all guesthouse licensees to procure third-party risk insurance for their guesthouses.

     The consultation paper also suggested that, apart from the safety matters, the provisions on the Deed of Mutual Covenant (DMC) and the views of the residents should be considered. The paper proposes to amend the Ordinance, and empower the Authority to refuse to issue licences where the DMC of the building concerned contains explicit restrictive provisions stipulating that commercial activities or guesthouse operations are not allowed in the building concerned, or the premises are for "private residential use" only.

     "Before the Legislative Council's endorsement of the amended Ordinance, the Authority will follow the verdict of the court of law, and revoke the licence or refuse the application if the court of law has granted the owners an injunction order. Besides, the OLA introduced a Notification System in April this year. Under the system, the OLA issue letters to the owners and the owners' corporation (OC) concerned when a licence application has been received, thus allowing time for the concerned parties to consider whether they would initiate any legal actions based on the DMC. The OLA will also suspend the processing of the application when the owners or the OC concerned file a case to the court of law," Mrs Tan said.

     To take into account local residents' views in the licensing process, the consultation paper sets out three feasible proposals, which are conducting local consultation through District Officers, setting up an independent panel to consider local views and propose suggestions to the Authority, and setting up a new statutory body responsible for the licensing work.

     "At this stage we keep an open mind to the three proposals, and we will make a decision after hearing the views from different sectors of the society," Mrs Tan said.

     The consultation document is available at all Public Enquiry Service Centres of District Offices or the HADíŽs website (www.had.gov.hk). Members of the public are invited to forward their views on or before August 28 by email (review_hagao@had.gov.hk), mail (Division IV, Home Affairs Department, 31/F Southorn Centre, 130 Hennessy Road, Wan Chai) or facsimile (2147 0984).

Ends/Friday, July 4, 2014
Issued at HKT 20:09

NNNN