Illegal guest-house clampdown

Penalties for unlicensed accommodation are too lenient, says lawmaker, who wants fines linked to profits in effort to boost safety and standards

PUBLISHED : Saturday, 11 January, 2014, 4:12am
UPDATED : Saturday, 11 January, 2014, 4:51am

The government is considering increasing the penalty for running an unlicensed guest house and lodging appeals in cases where it deems courts have been too lenient.

The moves are an attempt to stem an increase in the number of illegal guest houses in recent years, which has prompted concerns about safety and standards of accommodation.

Running an unlicensed guest house can result in a fine of up to HK$200,000 and a two-year prison sentence, with an additional HK$20,000 fine for each day the offence continues.

However, in most recent cases offenders have been fined just HK$2,000 to HK$3,000. In 44 prosecutions between July 1 last year and Monday, the heaviest fine imposed was HK$20,000, with two cases involving fines of HK$10,000, figures gathered by tourism sector lawmaker Yiu Si-wing's office show.

Of 161 people convicted of running unlicensed guest houses last year, seven were jailed for a maximum of two months, according to statistics from the Home Affairs Bureau. In one of these cases the sentence was suspended.

At a meeting of the Legislative Council's home affairs panel yesterday, Permanent Secretary for Home Affairs Raymond Young Lap-moon said the bureau would consider adjusting the penalty as it reviewed the Hotel and Guesthouse Accommodation Ordinance.

"Prosecution is difficult in the first place … Even in cases when the offenders are finally convicted, they are fined only HK$2,000 or HK$3,000. That's why many of them would breach the law again," he said.

The government would also consider appealing against sentences it deemed too low, Young said.

Yiu agreed the fines were not a sufficient deterrent and suggested they should be set at a multiple of the ill-gotten profits.

Lawmakers at the meeting also criticised the government for licensing guest houses in private buildings, even when guest-house use would breach the building's deed of covenant: the rules binding all owners of units in a building. The concerns were triggered by a fire at Continental Mansions in North Point last month in a building residents said contained several licensed guest houses in breach of the building's deed of covenant.

Young said that by law, the decision to grant a licence hinged only on whether the applicant met safety and hygiene requirements. The Office of the Licensing Authority could not take into account clauses in the deeds. But Young promised the government would inform residents, owners and management companies of such applications in future.

After last month's fire, Tourist Guest Houses Federation chairman Sam Lau said the city had more unlicensed guest houses than licensed ones.