4. Can I convert or use my property (or its sub-divided rooms) to grant short-term leases/licences in providing rooms or bedspaces to guests (similar to Airbnb accommodations or ‘capsule hotels’)?

4. Can I convert or use my property (or its sub-divided rooms) to grant short-term leases/licences in providing rooms or bedspaces to guests (similar to Airbnb accommodations or ‘capsule hotels’)?

An owner needs to verify as to whether the property permits domestic or residential uses under the relevant Government Lease, the existing Outline Zoning Plan and compliance of other applicable laws/regulations withenforced by the relevant authorities (e.g. Buildings Department, Fire Services Department and/or Drainage Services Department) and to examine whether it would be legal to ‘convert’ and use a property as a residence in such intended manner (‘capsule hotels’ in particular). In this respect, this involves highly complex and technical considerations which one must consult a lawyer and other professionals.

Secondly, even for “residential” premises, regardless of the intended granting of tenancy or a licence, all domestic agreements or letting arrangements are governed and closely monitored by the Home Affairs Department under the Hotel and Guesthouse Accommodation Ordinance (Cap. 349) and the Bedspace Apartments Ordinance (Cap. 447).

This is to say, any agreement or short-term letting arrangement made which may be regarded as part of an arrangement for the operation of a “hotel, motel, guesthouse, holiday flat or holiday camps” without obtaining a relevant licence or under an exemption (a short-term rental for a period of 28 continuous days with payment of a non-deductible/refundable rent) may be liable to prosecution as a criminal offence.

Similarly, the operation of a “Bedspace Apartment” for a “flat” which contains 12 or more “bedspaces occupied or intended to be occupied under rental agreements” without obtaining a relevant licence, the owner/landlord of such property may be liable to prosecution as amount to a criminal offence.

From past precedents, an owner must also be very careful in that any public advertisements which offers for short-term lettings or use of rooms/bedspaces (even without any successful letting) might become admissible in criminal proceedings for prosecution as evidence for proving the commission of an offence outlined above.