India: Illegal Guest Houses to face action if they fail to get a license

August 5, 2019

The Department of Town and Country Planning, Haryana (hereinafter referred to as ‘DTCP’) has notified that those guest houses which are operating without license must apply for the same in order to avoid being shut down. DTCP has also stated that these guest houses will also receive notices to reform the properties into residential properties to save themselves from facing strict action.

Recently, the DTCP has also removed the cap on the number of guest houses which are permitted in a residential zone in Haryana and also reduced the minimum plot size for setting up guest houses in a residential area from 1000 square yards to 500 square yards.

Easing the restriction of minimum plot size for guest houses will be a change which is welcomed and favoured by those looking to set up a new guest house, however the same is not likely to be welcomed by guest house which were being operating without the appropriate license.

According to recent survey reports, the annual revenue generated by illegal guest houses is around INR 300 Crores (Approx. USD 42,358,500) costing the state exchequer (Haryana) a huge amount.

Guesthouse owners usually carry out business from residential properties without paying the requisite conversion charges.

As per media reports, the Director of DTCP has also given a statement that – “After the new policy, the department will carry out a survey to identify which guesthouses are operating in an illegal manner. All such property owners will have to shut the guesthouses if they flout the new policy norms”.

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