Published on 23/10/2020 by Any Business.Com.Au

Everything You Need to Know About Buying a Motel

Owning a motel can be a satisfying investment if you do well. But to do well, you need to be savvy about your legal obligations to your guests, your employees, and the authorities. There are a number of national, state and local legal documents that require you to adhere to strict standards so your business runs as smoothly as possible.

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Before you buy a motel, it's good to know what's expected of you once you take over the business. If you're buying an established motel, you should check that the business has all the necessary permits and licences. And that means you'll want to know exactly what's needed before you commit. You should also familiarise yourself with operational standards that may apply to your accommodation business.

Here are the crucial points to running a motel that you'll want to remember so your work days run without a hitch:

Australian Health and Safety Standards for a Motel

As a business owner in Australia, you're legally required to have an Operational Health and Safety (OHS) policy, which helps you look after your guests, your staff and yourself.

Under the Work Health and Safety Act 2011, you're responsible for preventing injuries and illnesses to the people in your motel. In the hospitality industry, you should be aware of the potential risks to the health and safety of the people working in or attending your business place.

As an employer, you must provide:

• A safe place of work for your staff
• Safe operational procedures for your staff
• Safe equipment for your workers to use
• Training and supervision for your staff

When you buy an existing motel, an OHS policy should already be in place. Make sure that it covers how you and your staff should respond to and prevent hazards. This includes ensuring there are appropriate emergency procedures and fire prevention measures in place. Be sure it also outlines how your staff should perform certain tasks, such as wearing gloves when cleaning rooms.

As a motel owner, you're also obliged to respond appropriately to any unsafe building conditions. You must make sure the walls, floors, ceilings, windows, doors, and any other part of the building are in good condition.

Finally, as an employer you should record accidents and injuries and monitor working conditions to remain up-to-date about any OHS issues in your workplace.

Motel Licences, Permits and Legal Responsibilities

As you might expect, you may need any number of licences and permits to cover your motel business. Which licences and permits you need depends upon the services you may want to offer.

At a minimum, you'll probably need a motel business licence, which varies from state to state. In Queensland, for example, you'll need to register as a rental accommodation facility. To find out exactly which accommodation licence would apply in your state, use the Australian Business Licence and Information Service.

If you choose to offer a restaurant service at your motel, you'll need a host of licences that comply with food and alcohol service laws in your state. Your staff may also need hospitality certificates, such as the Responsibility to Serve Alcohol (RSA) certificate.

If you play music or videos to customers, even if just in your reception area, you may need a Music Licence. This covers both radio and television and can be procured from the Australasian Performing Right Association.

If you're buying an existing motel business, they probably already hold the appropriate licences and permits. But don't be lenient; make sure to check before you commit to buying.

If you want to make any renovations to a building structure or to plumbing before you begin running your motel business, you'll have to secure council approval before going ahead with any plans.

Legal Responsibilities as a Motel Owner

According to a number of national and state standards, accommodation providers, including motel owners, are responsible for guests and their property.

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Australian Consumer Law

The most important standard all motel owners should understand is the Australian Consumer Law and Fair Trading Act 2012. Under Consumer laws, accommodation providers must provide service that is carried out with due care and skill and in a timely and appropriate fashion.

Motel operators should clearly outline their policies for cancellations and cooling off periods, and make sure they're in accordance with the Australian Consumer Law. In some states, motel operators are further bound to the following standards:

• Australian Capital Territory – Innkeepers Liability Act 1902
• New South Wales – Innkeeper's Act 1968
• Northern Territory – Accommodation Providers Act 2002
• Western Australian – Liquor Licensing Act 1988
• Tasmania – Civil Liability Act 2002
• Queensland – Traveller Accommodation Providers Liability Act 2011

Anti-Discrimination Laws

As a motel owner, you must also make sure your business follows national anti-discrimination acts that protect citizens from unfair treatment because of gender, race, disability, and more.

Such acts make it unlawful to show discrimination when employing staff and providing goods, services, facilities and accommodation. Make sure you're up-to-date with the most recent acts. They include:

• The Sex Discrimination Act 1984
• The Disability Discrimination Act 1992
• The Racial Discrimination Act 1975

You can find the details of these acts on the Australian Human Rights Commission website.

Insuring Your Motel

Since you'll be operating a place of business where people trustingly store their possessions and stay for the night, you're publicly liable for both your guests and their property.

For this reason, comprehensive insurance is hugely important for a motel business. You'll want to insure your premises and accompanying assets.

But it's also a good idea to get additional insurance to cover paying guests and their property, so you're protected should anything adverse happen.

Don't forget that you're also responsible for your staff if anything should happen to them. You may want workers compensation insurance for them, as well as income protection for yourself.

Motel Leasehold Title

When you buy a motel, you may buy a leasehold title. Motel leases generally last at least 25 to 30 years.

For this length of time, you are typically considered something like the owner of the property. You'll be responsible for any OHS hazards, but the landlord usually pays for structural faults.

Make sure you understand the conditions of a lease before you buy any motel.

Additional Resources

Everybody loves a holiday, and with a motel, you can play an important role in make it the vacation to remember for every one of your guests. But you can't do this without understanding and incorporating your rights, responsibilities and duties into your business plan.

It's worthwhile to do your research now so that you're not left behind once you enter the accommodation industry.

To learn more about all the things you may need to know about running a motel business, join the Accommodation Association of Australia.

The Australian Competition & Consumer Commission is another brilliant place to go to learn about your duties and responsibilities as a motel owner.

AnyBusiness.com.au

Mary is the founder of AnyBusiness.com.au. She has a degree in Business from Monash University and been helping showcase businesses for sale for over 10 years. In the course of running her own business and working daily with business owners and brokers she has developed a keen sense of the Australian market for businesses for sale and shares her knowledge on this blog and others such as female.com.au

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