Motel Compliance Obligations

1 February 2022

We often hear the phrase that people are too busy working in their business to work on their business. This rings true for many moteliers who work long hours and struggle to find the chance to step back and conduct a general compliance health check of their business. There have been a number of changes in recent times and it is worth considering some of the more important legislative provisions that apply to motels.

Director Identification Numbers

Many businesses are owned by a company and moteliers need to be aware of the new laws relating to the introduction of Director Identification Numbers (DIN). These new laws amend the Corporations Act 2001 (Cth) (Corporations Act) and impose obligations which, if not adhered to, may result in civil and criminal penalties.

What is a DIN? A DIN is a 15-digit identification number unique to each director. A director must only apply for a DIN once and will then keep this number forever, including if they stop being a director, change to another company, are a director of multiple companies or move interstate or overseas.

Who needs a DIN? Acquiring a DIN is mandatory for all directors and alternate directors who are acting in the capacity as director (regardless of whether they are actually called a “director”) unless they are exempt.

How do I apply for a DIN? The DIN application is free and will be available from November 2021 through the electronic platform provided by the Registrar at ABRS. It is required that the director first set up a myGovID before starting the application. A director must apply for their own DIN because they will need to verify their identity. No-one can apply on their behalf.

There are civil and criminal penalties that may apply for directors who fail to obtain a DIN in the required timeframe or if directed by the Registrar to do so.  If you are a director, you should look into this now and seek further advice.

Fire Safety

The owner and occupier of a motel is responsible under various Queensland legislation for compliance with fire safety measures. A motel will be considered a “High Occupancy” building in relation to fire safety and there will often be a myriad of building legislation, council requirements and workplace health and safety considerations. Importantly a motel is not considered a domestic building in relation to the new smoke alarm legislation which takes effect from January 2022, however this is an opportune time to review your fire safety installations and take the time to have your premises inspected by a professional and ensure that all fire safety devices are in working order.

Work Health and Safety Act 2011 (the WHS Act)

The WHS Act and regulations impose obligations in relation to a variety of maters, but in the context of a motel, the ones to be aware of include providing a generally safe workplace environment, complying with asbestos requirements and ensuring electrical testing and tagging.

There is an overriding duty to ensure the health and safety of your workers, so far as is reasonably practicable. It really is worthwhile considering obtaining, from an expert, a work place review and putting in place procedures and policies which will govern the risk management issues for the motel business, including reviewing your insurances, developing a training program for existing and new staff and identifying particular areas of risk within your business.

Obligations in relation to asbestos materials are imposed on the person with the management or control of a workplace, which is more often than not, the tenant. That person must ensure that a register (an asbestos register) is prepared and kept at the workplace, maintained to ensure the information in the register is up to date and reviewed every 5 years. The requirement to keep and maintain a register applies to all buildings unless they were constructed after 31 December 1989 and no asbestos has been identified at the workplace and no asbestos is likely to be present at the workplace from time to time.

Finally, part of a moteliers WHS obligations will include ensuring that all electrical equipment is appropriately tagged and tested at the correct intervals. In relation to a motel, this is generally every 2 years.

The Australian Consumer Law (ACL)

The ACL is a nationwide business practice piece of legislation, which regulates dealings between consumers and businesses. In essence, the ACL requires that all business adhere to good business practices. In early September 2021, the government released some proposed amendments to the unfair contract terms regime. The purpose of the amendments is to strengthen consumer protection and encourage compliance with the ACL by deterring businesses from having unfair terms in contracts.

Generally speaking, a term will be unfair, and therefore void, if it:

  • causes a significant imbalance in the respective rights and obligations under the contract;
  • is not reasonably necessary to protect the legitimate interests of the benefitting party; and
  • would cause a detriment to the other party.

Under the current regime both private individuals and the ACL regulators (such as the Australian Competition and Consumer Commission) can apply to a Court to have a term deemed unfair in standard contracts, however no monetary penalties apply. The upcoming amendments will introduce significant monetary penalties and broaden the type of remedies available. It is hoped these amendments will act as both a protection mechanism for consumers and a strong deterrent for businesses engaging in such conduct.

The amendments include expanding the definition of ‘small business contracts’, broadening the penalties available and introducing a rebuttable presumption of similar terms to be unfair.

Whilst the amendments are expected to come into effect early to mid-2022, businesses will then have six months to identify contracts that might fall under the regime and have them reviewed by a lawyer and amended where necessary. It is worth starting to think about this now and consider your standard terms of booking and start reviewing all contracts.

Be alert…

…but do not be alarmed. Take the time to conduct a general review of your systems, procedures and the rules and legislation governing your motel business. We have only mentioned a handful of key pieces of legislation. It is more than likely there may also be liquor licencing rules, food and health regulations, sign requirements, council ordinances, pool safety, privacy issues (to name a few) that need to be considered in your business. If you think about the enormous effort that goes into making a business profitable, be it in the form of family sacrifice, marketing, paperwork, long hours or creditor demands, it is worth taking an active role, ensuring compliance and managing your risk. It is simply too late to realise that there were simple steps to be taken after receiving a penalty for non-compliance.

As each motel is different, please take our comments as general guidance and contact Mahoneys to obtain timely and practical legal advice on the actual issues you are facing.