Hotels, hostels and the homeless
Rupert Maude, head of valuation at surveyors Lambert Smith Hampton, examines the legal distinction between hostels and hotels that accommodate homeless guests.
The problem
The owners of a traditional south-coast holiday hotel have managed to offset the decline in the British seaside summer trade by taking in DSS "guests" for some years. However, these days this is not enough to prevent a spiral of falling turnover, declining standards and mounting losses.
As a short-term lifeline they have decided to take in asylum seekers who, while clearly paying less per night, will ensure nearly 100% occupancy, and the hotel's cost base will be much reduced.
Subsequently, the local planning authority takes note of complaints from neighbours, considers that a change of use has taken place and serves an enforcement notice.
The law
Permitted uses of buildings are contained in planning statutes, the most relevant being the Town and Country Planning (Use Classes) Order 1987. Hostels used to be classed with hotels under class C1 but, because of concerns over the creeping loss of hotels to hostel use and the effects on the amenities of the area, hostels were removed from class C1 on 4 April 1994 and are now treated as a use in their own right (sui generis).
There have been a number of recent cases highlighting this problem, notably Bloomfield & Montague Hotels in Great Yarmouth, Norfolk, where the court held that there had been a material change of use.
On the other hand, the Nayland Rock hotel in Margate, Kent, was considered not to have instigated a change of use despite between 50% and 77% of its rooms being used for housing asylum seekers. This was because they were treated in the same way as other paying guests, and there was little evidence of permanence and no communal facilities, such as kitchens for cooking their own food.
Expert advice
If you are considering augmenting the hotel trade by accommodating asylum seekers or homeless people and wish to avoid enforcement proceedings, it is important to maintain the appearance of a hotel.
This is a relatively new phenomenon and one where the law is changing with each case. Indeed, the Great Yarmouth cases are still subject to an appeal.
Beware
If it is demonstrable that an offence has been committed, the local authority has enforcement powers to stop the practice by issuing an enforcement notice against the owner. Such a notice can be accompanied by a "stop notice", which requires almost immediate cessation of the activities outlined in the enforcement notice.
Persons found guilty of a contravention will be liable to a fine on summary conviction of up to £20,000, or to an unlimited fine if convicted on indictment. In considering the level of fines, the court will have particular regard to the financial benefit that has accrued or appears likely to accrue as a consequence of the offence.
Check list
To avoid enforcement proceedings you must maintain the appearance of a hotel. This depends on:
The length of stay of residents.
Whether full board is provided.
Whether usual hotel services such as "turning down" are available.
Whether facilities are available for residents to prepare their own food.
Whether rooms are arranged as dormitories.
Standard of decor. Is it suitable to attract paying customers?
Ability to demonstrate advance tourist bookings.
The amount of guests' personal effects, such as pictures, etc, in the rooms.
Contacts
Lambert Smith Hampton 020 7494 4000
rmaude@lsh.co.uk
Further advice
Contact your local planning authority