The Government yesterday issued an ultimatum to residential care homes for the elderly to meet standards within 18 months after a prolonged grace period of more than three years. About half of the SAR's 644 elderly residential homes are still being given an exemption to operate although the Residential Care Homes (Elderly Persons) Ordinance has been in force since June 1996. 'Letters will be sent to unlicensed homes as an ultimatum to tell them that we are serious about it and exemption may not be renewed when it is due,' Eliza Leung Wong Kwok-shing, assistant director for Social Welfare, said. 'We'll take prosecution action against the homes if they refuse to improve by the deadline.' Exemptions are renewable after a grace period of three months to one year, forcing thousands of elderly people to live in inadequate conditions. Mrs Leung refused to disclose the number of homes that had had their exemption reissued repeatedly over the past three years. So far, three homes have been fined sums ranging from $3,000 to $10,000 for unlicensed operation and inadequate facilities. To enable operators to upgrade their premises, $14 million out of the $50-million Financial Assistance Scheme has been granted to 130 applicants. Rita Lam Yu-kiu, chairman of Association for the Rights of the Elderly, said: 'The Government has listened to us and has taken legal action against homes running without a licence.'