THE LEGAL POSITION ON REGISTRATION AND LICENSING OF AIRBNBS IN KENYA

Introduction

Airbnb among other accommodation platforms has gained immense popularity, providing individuals and entities with the opportunity to open their homes to travelers seeking authentic and unique accommodation options with more personalized experiences. As its popularity grows, understanding the legal position on their registration and licensing in Kenya becomes crucial.

This article delves into the legal intricacies surrounding the registration and licensing of such as Airbnb properties in Kenya, shedding light on the framework that hosts must navigate to operate within the bounds of the law.

Legal framework

Airbnb properties fall under Homestays, Service Apartments and Flats establishments and are regulated by the Tourism Regulatory Authority. This Authority is established under Section 4 of the Tourism Act, 2011 (“The Act”). The functions of the Authority are set out under Section 7, among them including to register, licence and grade all sustainable tourism and tourist-related activities and services including cottages and private residences engaged in guest house services.

Regulation 14 of the Tourism Regulatory Authority Regulations (TRAR) provides that the Authority shall be responsible for issuance of license for the operation of all tourism activities and services.

The Act defines tourism activities and services as any of the activities and services specified in the Ninth Schedule of the Act. The Ninth Schedule of the Tourism Act 2011 provides the various categories of regulated tourism activities and services. Homestays fall under class A (xi) are required to be registered under the Tourism Fund Regulations and licensed as per section 98 of the Tourism Act.

Section 98 (1) provides that:

“A person shall not undertake any of the tourism activities and services specified in the Ninth Schedule, unless that person has a licence issued by the Authority.”

Requirements for registration

Regulation 15 of the Tourism Fund Regulations (TFR) provides that:

1. Every owner of any tourism activity or service shall notify the Board of its operations within thirty days of commencement of business and shall register or cause the registration of their businesses with the Board in accordance with these Regulations.
2. The registration of any tourism activity or service shall be in Form No: TFR 2 specified in the Schedule. The application shall be accompanied with a:
3. Certificate of registration or incorporation
4. Single business permit
5. KRA PIN of the owner/company

Requirements for licensing

The requirements for licensing of airbnbs are set out under section 98 of the Tourism Act, 2011. They include:

1. Making an application to the Authority (in a prescribed form as set out in the Third Schedule of TRAR);
2. Payment of the prescribed fees by the Authority as set out under the fourth schedule of TRAR; and
3. Providing any further information required by the Authority in considering the application.

The Authority upon consideration of the application may grant the applicant the licence and may attach to the licence granted terms or conditions as the Authority may consider necessary or may deny the grant.

Note: The license expires on 31^st day of December every year and the application for renewal should

          be done at least two months prior to the expiration.

However, Regulation 19 of the Tourism Regulatory Authority Regulations provides that the application for renewal should be done 3 months prior to the expiry of an existing licence. It should be noted that the Act takes precedence and therefore the license should be renewed as per the Act.

Fees for licensing and renewal of licences for airbnbs

Note – The first schedule of TRAR provides the criteria that establishes the category of the homesta an accommodation falls under.

Obligations imposed on Licence holder

• Obligation to strictly adhere to the terms of the licence
• Obligation to renew the licence
• Record keeping (Regulation 27 of TRAR, Order 3 of Tourism Levy Order and regulation 8 & 18 of TFR)
• Payment of levy
• Obligation to provide data to the Authority on monthly basis (Reporting)

This is provided under Regulation 22(1) which provides:

“A holder of a license issued under these Regulations shall every month submit data in respect of the tourism activities and services as may be specified by the Authority, in particular –

(a) bed occupancy;

(b) number of visitors by country of origin:

(c) revenue earnings:

(d) expenditure per visitor; and

(e) number of employees both local and expatriates.”

Default             

A person that fails to comply with the provisions of the Act (including licensing), commits an offence and is liable, on conviction, to a fine not exceeding one hundred thousand shillings or to imprisonment for a term not exceeding eighteen months, or to both. This is provided under section 112 of the Act. The offences listed under this section include:

1. breach or failure to comply with the provisions of the Act;
2. breach or failure to comply with any of, the terms or conditions of a licence issued to him under the Act;
3. failure to comply with a lawful requirement or demand made or given by an authorized officer;
4. obstruction of a person in the execution of his powers or duties under this Act;
5. knowingly or recklessly making a statement or representation which is false;
6. knowingly or recklessly furnishing a document or information required under this Act which is false; or
7. knowingly or recklessly using or furnishing a fake or forged or invalid licence or a licence that has been altered without authorization.

All these offences are punishable as stated above.

Regulation 19 provides that any application submitted after the expiry date of the license shall attract a penalty of ten percent of the fees payable for each month defaulted.

Regulation 22 also provides that a person who fails to report to the Authority on a monthly basis commits an offence and is liable, on conviction, to a fine not exceeding one hundred thousand shillings or to imprisonment for a term not exceeding twelve months, or to both.

Regulation 3(2) of the TFR provides that if any person fails to pay any amount payable by him by way of the levy on or before the date prescribed by the Levy Order, such person shall be liable to an instant penalty of five thousand shillings and thereafter to an additional penalty of three per centum of the amount of the levy due, for each month or part thereof during which the amount due remains unpaid. This is in addition to the penalty under sections 112 and 114 of the Act (See Regulation 17). This penalty would also apply if one fails to register as such.

Appeals

Any person that is aggrieved with the decision of the Authority can file an appeal with the Tourism Tribunal. This is established by section 87 of the Act and its jurisdiction is set out under section 90. This should be done within 60 days of such decision. If the person is still aggrieved with the decision of the Tribunal, one can appeal at the High Court within 30 days of the decision and subsequently Court of Appeal within 60 days of decision.

Conclusion

In summary, adherence to the legal provisions governing the registration and licensing of homestay businesses is imperative. The legal framework in place underscores the significance of compliance for every participant in the sector. Failure to abide by these regulations may result in inconveniences and penalties, emphasizing the necessity for hosts to proactively engage in the formal registration processes.

NOTE: This article is for general information and does not constitute legal advice. If interested in getting legal advice or guidance in respect of the above topic or area, kindly do not hesitate to contact us via our email: info@knlawkenya.co.ke

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