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 26^th 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.