Homestay in Telangana:
When a Residential House Can Become Tourist Accommodation
Advocate Y Babji,
The concept of a homestay has gained considerable
popularity in Telangana with the growth of domestic tourism, weekend travel and
demand for accommodation that is more personal and home-like than a
conventional hotel. However, a significant legal question arises when a
residential house is used to accommodate paying guests: Does letting out rooms in a house automatically convert the premises into
a commercial establishment? The answer is no. But equally, every paying-guest
arrangement cannot be called a homestay.
The distinction is important because a homestay, a
paying guest accommodation, a serviced apartment, a hostel and a hotel are not
necessarily treated alike under building, planning, tourism and fire-safety regulations.
Under the Telangana Tourism Homestay Guidelines, a
homestay is essentially a form of tourist accommodation in a residential premise
where the owner and family continue to physically reside. The underlying idea
is that the visitor is staying in a genuine home rather than in a building
established exclusively for commercial lodging. The concept therefore combines
residential occupation by the owner with limited accommodation for tourists.
This is the first and most important distinction
between a genuine homestay and a commercial lodging establishment. A person
cannot simply take an independent residential building, vacate it and rent all
its rooms to tourists and then describe the property as a "homestay".
If the owner or promoter does not reside in the premises, the arrangement falls
outside the basic concept of the Telangana Tourism Homestay scheme.
The Telangana Tourism Guidelines also place limits
on the scale of a homestay. The scheme contemplates a limited number of
lettable rooms and provides for a maximum of five lettable rooms and ten beds.
These limitations are significant because they demonstrate that the Government
does not intend a large hotel or boarding establishment to operate under the
relatively lighter framework applicable to a family home receiving a limited
number of tourists.
Thus, the character of the activity depends not
merely on what the owner calls it but on what actually happens in the premises.
A second important point is that homestay registration under the Tourism
Department is not a substitute for building permission from the local authority.
The owner must still comply with the applicable municipal and building
regulations. The Tourism Guidelines themselves require documents relating to
the building and its approval by the competent local authority. Consequently,
registration as a homestay cannot be used to regularise an unauthorised
building or an unauthorised change of use.
This distinction is particularly relevant in
Hyderabad and other urban areas governed by the Telangana building regulations.
A residential building is sanctioned for a particular use. If the building is
subsequently converted into a hotel, lodge, large paying guest establishment or
commercial serviced apartment facility, the question of change of use and compliance
with planning regulations arises independently of any tourism registration.
For example, suppose a house is sanctioned as an
ordinary residential building. The owner lives there with the family and lets
out two or three rooms to tourists while continuing to occupy the premises.
Subject to compliance with the Telangana Tourism Homestay Guidelines and local
building requirements, this may qualify as a genuine homestay.
The situation would be quite different if the owner
vacates the house, divides it into numerous rooms, installs common facilities,
advertises it as accommodation and rents the rooms to unrelated persons on a
continuous commercial basis. Calling such an establishment a
"homestay" does not automatically make it one. Depending upon the
actual circumstances, it may be treated as a paying guest establishment,
hostel, lodging establishment or another form of commercial accommodation.
This brings us to another important distinction: a homestay is not the same thing as a paying
guest accommodation. In a traditional paying guest arrangement, the
property may be occupied by students, employees or other persons who pay for
accommodation, often for longer periods. The owner may or may not reside in the
premises. The Telangana Tourism Homestay Guidelines specifically distinguish
their homestay scheme from such arrangements.
Similarly, a serviced apartment cannot
automatically be classified as a homestay merely because each unit contains a
kitchen, bedroom and living area resembling a residential apartment. When
apartments are operated systematically as short-term accommodation for paying
customers as a business, the nature of the use may be commercial or
lodging-related even though the physical design resembles a residence.
The distinction has practical consequences for parking. A genuine residential house
is subject to residential parking requirements applicable to its sanctioned
use. A hotel or other non-residential commercial establishment can attract
substantially higher parking requirements. Under the Telangana Building Rules
framework, hotels, restaurants, lodges and other specified non-residential
buildings are subject to the applicable non-residential parking norms.
Therefore, an owner cannot necessarily avoid commercial parking requirements
simply by calling a commercial lodging operation a homestay.
Fire safety is another area where care is required.
It would be incorrect to assume that every homestay automatically requires
exactly the same fire-safety infrastructure as a large hotel. At the same time,
it would also be wrong to assume that calling a building a homestay completely
removes fire-safety obligations. The applicable requirements depend upon
factors such as the nature of occupancy, building height, built-up area,
occupant load and the applicable Fire Services regulations. Where the building
or activity falls within the relevant fire-safety categories, the necessary
approvals and safety measures have to be obtained.
The Tourism Homestay Guidelines themselves
contemplate guest safety and require information relating to fire-fighting
equipment and other safety arrangements. A responsible homestay operator should
therefore treat fire safety as a substantive obligation rather than merely a
paperwork requirement.
Another misconception is that obtaining a trade licence, GST registration or tourism
registration automatically authorises the building use. These are
different regulatory matters. A tourism registration identifies and regulates
the accommodation activity from the tourism perspective. Municipal building
permission determines whether the building is legally constructed and whether
the proposed use is permissible. Fire authorities examine fire and life-safety
compliance where applicable. Land-use and zoning regulations determine whether
the proposed activity is permissible at that location.
Therefore, the legal position can be understood as
a chain: the land must permit the activity; the building must have valid
sanction; the sanctioned use must be compatible with the proposed activity; the
building must satisfy applicable parking and safety requirements; and the
operator must obtain the necessary business or tourism registration.
The concept of homestay is valuable because it
provides an opportunity for homeowners to participate in tourism without
converting every residential neighbourhood into a hotel district. At the same
time, the scheme should not become a mechanism for circumventing building
regulations, parking requirements, fire-safety standards or zoning
restrictions.
The real test, therefore, is not the name displayed
on the property's signboard or the description used in an online booking
platform. The real test is the substance
of the activity. Is the owner actually living in the house? How many
rooms are being offered? How many beds are provided? Who are the occupants? Are
they tourists or long-term residents? Is the property being operated as a
family home with limited guest accommodation or as a dedicated commercial
lodging establishment? What does the sanctioned building plan say? What does
the applicable zoning permit?
These questions are far more important than whether
the operator calls the premises a "homestay", "guest
house", "PG" or "serviced apartment".
The growing popularity of homestays is a positive
development for tourism and local entrepreneurship. But their sustainable
growth depends upon maintaining the distinction between a home that welcomes guests and a commercial lodging establishment operating
under the label of a home. When that distinction is respected, homestays
can provide visitors with an authentic local experience while enabling
homeowners to participate in Telangana's expanding tourism economy without
compromising urban planning, parking, building safety and neighbourhood
interests.
In short, Telangana's Homestay Guidelines effective
from 26th July 2016 are designed to encourage small-scale,
owner-occupied tourist accommodation, not to provide a route for converting an
entire residential building into a hotel, PG or serviced apartment
establishment without complying with the applicable municipal, planning,
parking and safety regulations.
In conclusion, a genuine homestay in Telangana
occupies a special position between ordinary residential occupation and
commercial hotel accommodation. It is fundamentally based on a residential home
in which the owner and family continue to reside while providing limited
accommodation to visitors. The Tourism Department's homestay registration
provides a regulatory framework for such activity, but it does not override
municipal building laws or legalise an unauthorised change of use.
