Buy a Hotel in Italy: legal aspects of investing in a hotel business in Italy
This article briefly compares the legislative framework and legal differences between the Italian and the English jurisdictions: for more information, contact the authors directly.
There is a plethora of laws, regulations and codes to consider before becoming or for that matter being a hotelier. There is a minefield of bureaucracy to understand, ranging from licensing rules to food hygiene and fire regulations. Ignorance is no excuse in the eyes of the law if something goes wrong. The cost to remedy breaches of the law can range from criminal and civil actions (including fines) and even imprisonment for more serious breaches. Below, are just a few examples of legal matters to which any hotelier must adhere.
A. Employment Matters
UK: Anyone employing staff must comply with employment legislation. Major pieces of legislation which must be considered include:
It is an employer’s responsibility to check that someone taken on is entitled to work in the UK. There are fines for employers who employ illegal workers because they have failed to make the necessary checks.
It is inevitable that accidents happen in public places including hotels. Unfortunately in these current times of litigation and blame culture it’s important to mitigate the threat of being sued (whether founded or unfounded). One of the most important areas of hotel insurance is public liability insurance which most insurance providers will provide as part of an overall package deal. Similarly under the Employer’s Liability (Compulsory Insurance) Act 1969 employers must be adequately insured for their employees as well as display the insurance certificate inside the hotel.
ITALY: In the hospitality sector, national federations of labour unions pensions and employers’ organisations are signatories to national collective bargaining agreements. The terms constitute effective de minimis standard employment provisions that apply, regardless of whether the parties to the relevant employment contract are members of the local branch of national signatory federations. In November 2005, a supplementary health assistance plan was also created for employees and workers of the tourism sector. Under its health plan, subscription fees for full-time and part-time employees must be fully borne by employers alone.
B. Health and Safety
UK: Employers have a duty to ensure the health and safety at work of all their employees and those with five or more employees must prepare a written health and safety policy statement.
One of the most serious threats to a hotel business and guests is an unexpected fire. Typically this is caused by a kitchen fire but also occasionally occurs due to an electrical appliance overheating or a guest causing some sort of accident. As well as the obvious safety precautions such as installing fire extinguishers, fire exit signs, checking fire exits and undertaking regular fire drills a hotel manager must also limit the ability of a potential fire to spread. Therefore if starting up a new hotel or taking over a hotel in need of a facelift the process of choosing fixtures and fittings for the bedrooms and other living areas is that much more important. Only fire-retardant furniture should be purchased that complies with the Furniture and Furnishings (Fire) (Safety) Regulations 1988. Most modern furniture is compliant and will have a ready tree label attached to it confirming this. Most building insurance policies will stipulate that the hotel adheres to statutory fire regulations.
Likewise, to protect the safety and health and welfare of guests, hoteliers are obliged to ensure that all gas equipment and gas appliances meet with the Gas Safety (Installation and Use) Regulations 1994. It’s probable that the main industrial boiler will be heating the building constantly seven days a week to provide hot water and heating for guests. Failure to properly ensure maintenance of this boiler could result not just in machine failure but gas leakage and consequent safety disasters.
The Health and Safety at Work Act 1974 requires that hoteliers must take notice of substances that may cause injury or illness to their staff. In particular, employees should be provided with any proper protective clothing required to handle harmful substances. These may include some type of cleaning fluids such as chemical-based bleach for general maintenance and building repair materials. Employees are also protected under the Act in that they cannot be required to work excessive hours or any unsuitable shift pattern which could result in an accident or ill-health from fatigue. Supplementing this health and safety requirement is the introduction of the Working Time Regulations 1998 which specifically dictates rest breaks, shift patterns, annual leave entitlement and working hours for all employees. Running a small or medium-sized hotel can be a busy and hard-working environment and so it’s important to plan ahead for any possible absences or illnesses where cover is required at short notice.
ITALY: Hotel management must exercise reasonable care in the health and safety aspects of the hotel premises for the benefit of their guests. Management must ensure the cleanliness of premises and rooms. It must ensure fire safety for the protection of lodging guests. In particular, careful and regular evaluation of the fire alarm, sprinkler, and extinguishing systems, fire prevention and containment, safe and adequate egress, electrical safety and employee training in fire safety must all be undertaken. Maintenance and inspections of heating and air-conditioning systems must also be carried out regularly so as to ensure appropriate indoor air quality. Hotels are also required to identify and evaluate safety and health hazards so as to implement mitigation remedies and programmes.
Pursuant to public places anti-smoking legislation, hotel common areas(e.g. lobby, restaurant, convention hall, etc.) must be smoke-free.
Smoking is only allowed in special sealed-off areas fitted with smoke extractors and inside hotel suites reserved for smoking guests. Hotels are also required to ensure good disabled access facilities and to remove any physical barriers making it difficult for disabled users to access hotel premises and services.
C. Environment and Waste Matters
UK: If a business produces food waste - most catering businesses do – it is essential that it is disposed of correctly. It mustn't contaminate the environment and it can't be fed to livestock. If a waste carrier is used to get rid of waste they must be properly authorised.
ITALY: Hotels have to meet specific legal requirements pertaining to the separate collection and treatment of solid, organic and liquid waste; treatment and disposal of used oils, fats and hazardous waste (if any); waste water and sewerage system plant and disposal. For this purpose, hotels are bound to draft and implement a waste management program detailing selection, storage and disposal criteria and methods to follow. Hotels must also comply with applicable rules pertaining to noise. Plant rooms, kitchens and laundries, waste management areas (including compactors), garages, discotheques and lobby areas must not exceed decibel limits as stated by law.
D. Food, Beverages and Hygiene
UK: All businesses in the food sector must comply with strict food safety legislation. Before a hotel can be opened, the business must be registered with the local authority environmental health department. The local environmental health officer will be able to give advice and guidance as to what should be installed in the premises to make sure operating areas are hygienic and furthermore how to comply with the requirements of the Food Safety Act and regulations made under it.
If food is served at the hotel there are legal duties to ensure the food is prepared in a hygienic fashion and in the proper way for the safety of guests. Many local colleges provide formal training courses on food hygiene for those new hoteliers who have limited experience in this area. Poor hygiene and food management can result in food poisoning of guests. Food poisoning represents one of the most serious threats to a hotel/hospitality business. Food poisoning can be created because germs can cause diseases and illnesses if allowed to spread between humans and food. Germs thrive at certain temperatures in order to multiply and spread and so understanding which types of food need to be heated or cooled and at what specific temperatures ranges is vital.
If an environmental health officer visits a hotel and discovers poor hygiene standards they have the right to close the hotel for the welfare of your guests. General cleanliness is also one of the top factors that guests would consider in deciding whether or not to return to the hotel they have stayed in. Therefore formal hygiene training of kitchen staff and staff responsible for cleaning and maintenance is not just a legal obligation but good business practice. Underpinning this approach to ensuring compliance with food hygiene standards must be an overall system and procedure for quality standards. Having a written document process for checking cleanliness, food temperatures, maintenance schedules, safety and security checks are all highly relevant to comply with a whole raft of statutory obligations.
Likewise most hotels also like to provide guests with alcohol as well as food. Therefore hotels need to adhere to the Licensing Act 1964. Assuming a licence has been granted most hotels are free to source their alcoholic beverages from whatever source they see fit. However, the Act dictates all aspects of serving alcohol such as the cleanliness of optics, pipes and glasses as well as the unit measures which you can advertise and sell at. A ‘public room’ would need to be converted into a bar to serve alcoholic beverages. If planning to serve alcohol during mealtimes a residential and restaurant licence is a legal requirement which is sometimes known as a Function’s Licence.
ITALY: Where a bar/restaurant service is operated, hotels are required to adopt an internal HACCP auto-control system (Hazard Analysis and Critical Control Points) and a code of correct hygiene practice whereby responsibilities, standards and processes are carefully established to ensure that food and drink handling, preparation, storage and delivery as well as health & safety conditions of related hotel facilities and workers comply with EU and domestic regulations. In particular, food handling, preparation and storage, must avoid or minimise their impact on guests’ health, including food poisoning or the transmission of other diseases. Regular and unscheduled inspections are generally made by local health authorities to verify compliance with these legal requirements.
This article summarises just a few of the key statutes and regulations hoteliers need to think about whether getting started or achieving a legally compliant and well-run hotel. It is important to ensure that you are fully aware of all other laws related to your individual situation and how they may apply to your plans. A hotel business will thrive if all these factors are well managed because guests will always recommend a well-run establishment.
Our multilingual specialists can assist with all legal aspects of starting a new venture and offer a bespoke services to clients at all levels of company start-ups. If you would like to speak to one of our lawyers, please contact us online or call our Client Relations Team on +44 870 111 4802 or +39 091 743 4778.